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Income Tax (Earnings and Pensions) Act 2003

  • Explanatory Notes Table of contents

Please note:

All reference to 'Parts' and 'sections' are from the Income Tax (Earnings and Pensions) Act 2003. For other versions of these Explanatory Notes, see More Resources.

  1. Summary

  2. Background

    1. The Tax Law Rewrite Project

    2. Steering Committee

    3. Consultative Committee

    4. Consultation

    5. A brief history of the taxation of employment income

    6. Employment income, pensions and social security

  3. The Act

  4. Commentary on Sections

    1. Glossary

      1. Part 1: Overview

        1. Section 1: Overview of contents of this Act

        2. Section 2: Abbreviations and defined expressions

      2. Part 2: Employment income: charge to tax

        1. Chapter 1: Introduction

          1. Section 3: Structure of employment income Parts

          2. Section 4: “Employment” for the purposes of the employment income Parts

          3. Section 5: Application to offices and office-holders

        2. Chapter 2: Tax on employment income

          1. Section 6: Nature of charge to tax on employment income

          2. Section 7: Meaning of “employment income”, “general earnings” and “specific employment income”

          3. Section 8: Meaning of “exempt income”

        3. Chapter 3: Operation of tax charge

          1. Section 9: Amount of employment income charged to tax

          2. Section 10: Meaning of “taxable earnings” and “taxable specific income”

          3. Section 11: Calculation of “net taxable earnings”

          4. Section 12: Calculation of “net taxable specific income”

          5. Section 13: Person liable for tax

        4. Chapter 4: Taxable earnings: rules applying to employee resident, ordinarily resident and domiciled in UK

          1. Overview

            1. Section 14: Taxable earnings under this Chapter: introduction

            2. Section 15: Earnings for year when employee resident, ordinarily resident and domiciled in UK

            3. Section 16: Meaning of earnings “for” a tax year

            4. Section 17: Treatment of earnings for year in which employment not held

            5. Section 18: Receipt of money earnings

            6. Section 19: Receipt of non-money earnings

        5. Chapter 5: Taxable earnings: rules applying to employee resident, ordinarily resident or domiciled outside UK

          1. Overview

            1. Section 20: Taxable earnings under this Chapter: introduction

            2. Section 21: Earnings for year when employee resident and ordinarily resident, but not domiciled, in UK, except chargeable overseas earnings

            3. Section 22: Chargeable overseas earnings for year when employee resident and ordinarily resident, but not domiciled, in UK

            4. Section 23: Calculation of “chargeable overseas earnings”

            5. Section 24: Limit on chargeable overseas earnings where duties of associated employment performed in UK

            6. Section 25: UK-based earnings for year when employee resident, but not ordinarily resident, in UK

            7. Section 26: Foreign earnings for year when employee resident, but not ordinarily resident, in UK

            8. Section 27: UK-based earnings for year when employee not resident in UK

            9. Section 28: Meaning of “general earnings from overseas Crown employment subject to UK tax”

            10. Section 29: Meaning of earnings “for” a tax year

            11. Section 30: Treatment of earnings for year in which employment not held

            12. Section 31: Receipt of money earnings

            13. Section 32: Receipt of non-money earnings

            14. Section 33: Earnings remitted to the UK

            15. Section 34: Earnings remitted to the UK: further provisions about UK-linked debts

            16. Section 35: Relief for delayed remittances

            17. Section 36: Election in respect of delayed remittances

            18. Section 37: Claims for relief on delayed remittances

            19. Section 38: Earnings for period of absence from employment

            20. Section 39: Duties in UK merely incidental to duties outside UK

            21. Section 40: Duties on board vessel or aircraft

            22. Section 41: Employment in UK sector of continental shelf

        6. Chapter 6: Disputes as to domicile or residence

          1. Overview

            1. Section 42: Board to determine dispute as to domicile or ordinary residence

            2. Section 43: Appeal against Board’s decision on domicile or ordinary residence

        7. Chapter 7: Application of provisions to agency workers

          1. Overview

            1. Section 44: Treatment of workers supplied by agencies

            2. Section 45: Arrangements with agencies

            3. Section 46: Cases involving unincorporated bodies etc.

            4. Section 47: Interpretation of this Chapter

        8. Chapter 8: Application of provisions to workers under arrangements made by intermediaries

          1. Overview

            1. Section 48: Scope of this Chapter

            2. Section 49: Engagements to which this Chapter applies

            3. Section 50: Worker treated as receiving earnings from employment

            4. Section 51: Conditions of liability where intermediary is a company

            5. Section 52: Conditions of liability where intermediary is a partnership

            6. Section 53: Conditions of liability where intermediary is an individual

            7. Section 54: Calculation of deemed employment payment

            8. Section 55: Application of rules relating to earnings from employment

            9. Section 56: Application of Income Tax Acts in relation to deemed employment

            10. Section 57: Earlier date of deemed employment payment in certain cases

            11. Section 58: Relief in case of distributions by intermediary

            12. Section 59: Provisions applicable to multiple intermediaries

            13. Section 60: Meaning of “associate”

            14. Section 61: Interpretation

      3. Part 3: Employment income: earnings and benefits etc. treated as earnings

        1. Chapter 1: Earnings

          1. Section 62: Earnings

        2. Chapter 2: Taxable benefits: the benefits code

          1. Overview

            1. Section 63: The benefits code

            2. Section 64: Relationship between earnings and benefits code

            3. Section 65: Dispensations relating to benefits within provisions not applicable to lower-paid employment

            4. Section 66: Meaning of “employment” and related expressions

            5. Section 67: Meaning of “director” and “full-time working director”

            6. Section 68: Meaning of “material interest” in a company

            7. Section 69: Extended meaning of “control”

        3. Chapter 3: Taxable benefits: expenses payments

          1. Overview

            1. Section 70: Sums in respect of expenses

            2. Section 71: Meaning of paid or put at disposal by reason of the employment

            3. Section 72: Sums in respect of expenses treated as earnings

        4. Chapter 4: Taxable benefits: vouchers and credit-tokens

          1. Overview

            1. Section 73: Cash vouchers to which this Chapter applies

            2. Section 74: Provision for, or receipt by, member of employee’s family

            3. Section 75: Meaning of “cash voucher”

            4. Section 76: Sickness benefits-related voucher

              1. £150(Pe) – £60(E) = £90

    2. Example 2

      1. £150(Pe) - £60(E) = £90

    3. Example 3

      1. £150(Pe) – £50(E) = £100

        1. Section 77: Apportionment of cost of provision of voucher

        2. Section 78: Voucher made available to public generally

        3. Section 79: Voucher issued under approved scheme

        4. Section 80: Vouchers where payment of sums exempt from tax

        5. Section 81: Benefit of cash voucher treated as earnings

        6. Section 82: Non-cash vouchers to which this Chapter applies

        7. Section 83: Provision for, or receipt by, member of employee’s family

        8. Section 84: Meaning of “non-cash voucher”

        9. Section 85: Non-cash voucher made available to public generally

        10. Section 86: Transport vouchers under pre-26March 1982 arrangements

        11. Section 87: Benefit of non-cash voucher treated as earnings

        12. Section 88: Year in which earnings treated as received

        13. Section 89: Reduction for meal vouchers

        14. Section 90: Credit-tokens to which this Chapter applies

        15. Section 91: Provision for, or use by, member of employee’s family

        16. Section 92: Meaning of “credit-token”

        17. Section 93: Credit-token made available to public generally

        18. Section 94: Benefit of credit-token treated as earnings

        19. Section 95: Disregard for money, goods or services obtained

        20. Section 96: Dispensations relating to vouchers or credit-tokens

        21. Chapter 5: Taxable benefits: living accommodation

          1. Overview

            1. Section 97: Living accommodation to which this Chapter applies

            2. Section 98: Accommodation provided by local authority

            3. Section 99: Accommodation provided for performance of duties

            4. Section 100: Accommodation provided as result of security threat

            5. Section 101: Chevening House

            6. Section 102: Benefit of living accommodation treated as earnings

            7. Section 103: Method of calculating cash equivalent

            8. Section 104: General rule for calculating cost of providing accommodation

            9. Section 105: Cash equivalent: cost of accommodation not over £75,000

            10. Section 106: Cash equivalent: cost of accommodation over £75,000

            11. Section 107: Special rule for calculating cost of providing accommodation

            12. Section 108: Cash equivalent: accommodation provided for more than one employee

            13. Section 109: Priority of this Chapter over Chapter 1 of this Part

            14. Section 110: Meaning of “annual value”

            15. Section 111: Disputes as to annual value

            16. Section 112: Meaning of “person involved in providing the accommodation”

            17. Section 113: Meaning of “the property”

        22. Chapter 6: Taxable benefits: cars, vans and related benefits

          1. Overview

            1. Section 114: Cars, vans and related benefits

            2. Section 115: Meaning of “car” and “van”

            3. Section 116: Meaning of when car or van is available to employee

            4. Section 117: Meaning of car or van made available by reason of employment

            5. Section 118: Availability for private use

            6. Section 119: Where alternative to benefit of car offered

            7. Section 120: Benefit of car treated as earnings

            8. Section 121: Method of calculating the cash equivalent of the benefit of a car

            9. Section 122: The price of the car

            10. Section 123: The list price of a car

            11. Section 124: The notional price of a car with no list price

            12. Section 125: Meaning of “accessory” and related terms

            13. Section 126: Amounts taken into account in respect of accessories

            14. Section 127: The list price of an accessory

            15. Section 128: Accessory: published price of the car manufacturer etc.

            16. Section 129: Accessory: published price of the accessory manufacturer etc.

            17. Section 130: The notional price of an accessory

            18. Section 131: Replacement accessories

            19. Section 132: Capital contributions by employee

            20. Section 133: How to determine the “appropriate percentage”

            21. Section 134: Meaning of car with or without a CO2 emissions figure

            22. Section 135: Car with a CO2 emissions figure: pre-October 1999 registration

            23. Section 136: Car with a CO2 emissions figure: post-September 1999 registration

            24. Section 137: Car with a CO2 emissions figure: bi-fuel cars

            25. Section 138: Car with a CO2 emissions figure: automatic car for a disabled employee

            26. Section 139: Car with a CO2 emissions figure: the appropriate percentage

            27. Section 140: Car without a CO2 emissions figure: the appropriate percentage

            28. Section 141: Diesel cars: the appropriate percentage

            29. Section 142: Car first registered before 1st January 1998: the appropriate percentage

            30. Section 143: Deduction for periods when car unavailable

            31. Section 144: Deduction for payments for private use

            32. Section 145: Modification of provisions where car temporarily replaced

            33. Section 146: Cars that run on road fuel gas

            34. Section 147: Classic cars: 15 years of age or more

            35. Section 148: Reduction of cash equivalent where car is shared

            36. Section 149: Benefit of car fuel treated as earnings

            37. Section 150: Car fuel: calculating the cash equivalent

            38. Section 151: Car fuel: nil cash equivalent

            39. Section 152: Car fuel: proportionate reduction of cash equivalent

            40. Section 153: Car fuel: reduction of cash equivalent

            41. Section 154: Benefit of van treated as earnings

            42. Section 155: Method of calculating the cash equivalent of the benefit of a van

            43. Section 156: Meaning of “shared van”

            44. Section 157: Value of exclusive availability

            45. Section 158: Deduction for periods of unavailability or shared use

            46. Section 159: Deduction for payments for private use

            47. Section 160: Value of shared availability

            48. Section 161: Value of shared availability: normal calculation

            49. Section 162: Shared van: meaning of “participating employee”

            50. Section 163: Shared van: basic value

            51. Section 164: Value of shared availability: alternative calculation

            52. Section 165: Deduction for payments for private use

            53. Section 166: Vans: limit of cash equivalent

            54. Section 167: Pooled cars

            55. Section 168: Pooled vans

            56. Section 169: Car available to more than one member of family or household employed by same employer

            57. Section 170: Orders etc. relating to this Chapter

            58. Section 171: Minor definitions: general

            59. Section 172: Minor definitions: equipment to enable a disabled person to use a car

        23. Chapter 7: Taxable Benefits: Loans

          1. Overview

            1. Section 173: Loans to which this Chapter applies

            2. Section 174: Employment-related loans

            3. Section 175: Benefit of taxable cheap loan treated as earnings

            4. Section 176: Exception for loans on ordinary commercial terms

            5. Section 177: Exceptions for loans at fixed rate of interest

            6. Section 178: Exceptions for loans where interest qualifies for tax relief

            7. Section 179: Exception for certain advances for necessary expenses

            8. Section 180: Threshold for benefit of loan to be treated as earnings

            9. Section 181: The official rate of interest

            10. Section 182: Normal method of calculation: averaging

            11. Section 183: Alternative method of calculation

            12. Section 184: Interest treated as paid

            13. Section 185: Apportionment of cash equivalent in case of joint loan etc.

            14. Section 186: Replacement loans

            15. Section 187: Aggregation of loans by close company to director

            16. Section 188: Loan released or written off: amount treated as earnings

            17. Section 189: Exception where double charge

            18. Section 190: Exclusion of charge after death of employee

            19. Section 191: Claim for relief to take account of event after assessment

        24. Chapter 8: Taxable benefits: notional loans in respect of acquisitions of shares

          1. Overview

            1. Section 192: Application of this Chapter

            2. Section 193: Notional loan where acquisition for less than market value

            3. Section 194: The amount of the notional loan

            4. Section 195: Discharge of notional loan: amount treated as earnings

            5. Section 196: Effects on other income tax charges

            6. Section 197: Minor definitions

        25. Chapter 9: Taxable benefits: disposals of shares for more than market value

          1. Overview

            1. Section 198: Shares to which this Chapter applies

            2. Section 199: Disposal for more than market value: amount treated as earnings

            3. Section 200: Minor definitions

        26. Chapter 10: Taxable benefits: residual liability to charge

          1. Overview

            1. Section 201: Employment-related benefits

            2. Section 202: Excluded benefits

            3. Section 203: Cash equivalent of benefit treated as earnings

            4. Section 204: Cost of the benefit: basic rule

            5. Section 205: Cost of the benefit: asset made available without transfer

            6. Section 206: Cost of the benefit: transfer of used or depreciated asset

            7. Section 207: Meaning of “annual rental value”

            8. Section 208: Meaning of “market value”

            9. Section 209: Meaning of “persons providing benefit”

            10. Section 210: Power to exempt minor benefits

          2. Special rules for scholarships

            1. Overview

              1. Section 211: Special rules for scholarships: introduction

              2. Section 212: Scholarships provided under arrangements entered into by employer or connected person

              3. Section 213: Exception for certain scholarships under trusts or schemes

              4. Section 214: Scholarships: cost of the benefit

              5. Section 215: Limitation of exemption for scholarship income in section 331 of ICTA

        27. Chapter 11: Taxable benefits: exclusion of lower-paid employments from parts of benefits code

          1. Introduction

            1. Section 216: Provisions not applicable to lower-paid employments

            2. Section 217: Meaning of “lower-paid employment”

            3. Section 218: Calculation of earnings rate for a tax year

            4. Section 219: Extra amounts to be added in connection with a car

            5. Section 220: Related employments

        28. Chapter 12: Payments treated as earnings

          1. Overview

            1. Section 221: Payments where employee absent because of sickness or disability

            2. Section 222: Payments by employer on account of tax where deduction not possible

            3. Section 223: Payments on account of director’s tax other than by the director

            4. Section 224: Payments to non-approved personal pension arrangements

            5. Section 225: Payments for restrictive undertakings

            6. Section 226: Valuable consideration given for restrictive undertakings

        29. Part 4: Employment income: exemptions

          1. Chapter 1: Exemptions: general

            1. Section 227: Scope of Part 4

            2. Section 228: Effect of exemptions on liability under provisions outside Part 2

          2. Chapter 2: Exemptions: mileage allowances and passenger payments

            1. Overview

              1. Section 229: Mileage allowance payments

              2. Section 230: The approved amount for mileage allowance payments

              3. Section 231: Mileage allowance relief

              4. Section 232: Giving effect to mileage allowance relief

              5. Section 233: Passenger payments

              6. Section 234: The approved amount for passenger payments

              7. Section 235: Vehicles to which this Chapter applies

              8. Section 236: Interpretation of this Chapter

          3. Chapter 3: Exemptions: other transport, travel and subsistence

            1. Section 237: Parking provision and expenses

            2. Section 238: Modest private use of heavy goods vehicles

            3. Section 239: Payments and benefits connected with taxable cars and vans and exempt heavy goods vehicles

            4. Section 240: Incidental overnight expenses and benefits

            5. Section 241: Incidental overnight expenses and benefits: overall exemption limit

            6. Section 242: Works transport services

            7. Section 243: Support for public bus services

            8. Section 244: Cycles and cyclist’s safety equipment

            9. Section 245: Travelling and subsistence during public transport strikes

            10. Section 246: Transport between work and home for disabled employees: general

            11. Section 247: Provision of cars for disabled employees

            12. Section 248: Transport home: late night working and failure of car-sharing arrangements

            13. Section 249: Interpretation of this Chapter

          4. Chapter 4: Exemptions: education and training

            1. Overview

              1. Section 250: Exemption of work-related training provision

              2. Section 251: Meaning of “work-related training”

              3. Section 252: Exception for non-deductible travel expenses

              4. Section 253: Exception where provision for excluded purposes

              5. Section 254: Exception where unrelated assets are provided

              6. Section 255: Exemption for contributions to individual learning account training

              7. Section 256: Meaning of “individual learning account training”

              8. Section 257: Exception for non-deductible travel expenses

              9. Section 258: Exception where provision for excluded purposes

              10. Section 259: Exception where unrelated assets are provided

              11. Section 260: Exception where training not generally available to staff

          5. Chapter 5: Exemptions: recreational benefits

            1. Recreational facilities

              1. Section 261: Exemption of recreational benefits

              2. Section 262: Benefits not exempted by section 261

              3. Section 263: Power to alter benefits to which section 261 applies

              4. Section 264: Annual parties and functions

              5. Section 265: Third party entertainment

          6. Chapter 6: Exemptions: Non-cash vouchers and credit-tokens

            1. Overview

              1. Section 266: Exemption of non-cash vouchers for exempt benefits

              2. Section 267: Exemption of credit-tokens used for exempt benefits

              3. Section 268: Exemption of vouchers and tokens for incidental overnight expenses

              4. Section 269: Exemption where benefits or money obtained in connection with taxable car or van or exempt heavy goods vehicle

              5. Section 270: Exemption for small gifts of vouchers and tokens from third parties

          7. Chapter 7: Exemptions: Removal benefits and expenses

            1. Section 271: Limited exemption of removal benefits and expenses: general

            2. Section 272: Removal benefits and expenses to which section 271 applies

            3. Section 273: Conditions applicable to change of residence

            4. Section 274: Meaning of “the limitation day”

            5. Section  275: Meaning of “the employment change”

            6. Section 276: Meaning of “residence”, “former residence” and “new residence” etc.

            7. Section 277: Acquisition benefits and expenses

            8. Section 278: Abortive acquisition benefits and expenses

            9. Section 279: Disposal benefits and expenses

            10. Section 280: Transporting belongings

            11. Section 281: Travelling and subsistence

            12. Section 282: Exclusion from section 281 of benefits and expenses where deduction allowed

            13. Section 283: Exclusion from section 281 of taxable car and van facilities

            14. Section 284: Bridging loan expenses

            15. Section 285: Replacement of domestic goods

            16. Section 286: Power to amend sections 279 to 285

            17. Section 287: Limit on exemption

            18. Section 288: Limited exemption of certain bridging loans connected with employment moves

            19. Section 289: Relief for certain bridging loans not qualifying for exemption under section 288

          8. Chapter 8: Exemptions: Special kinds of employees

            1. Section 290: Accommodation benefits of ministers of religion

            2. Section 291: Termination payments to MPs and others ceasing to hold office

            3. Section 292: Overnight expenses allowances of MPs

            4. Section 293: Overnight expenses of other elected representatives

            5. Section 294: EU travel expenses of MPs and other representatives

            6. Section 295: Transport and subsistence for Government ministers etc.

            7. Section 296: Armed forces’ leave travel facilities

            8. Section 297: Armed forces’ food, drink and mess allowances

            9. Section 298: Reserve and auxiliary forces’ training allowances

            10. Section 299: Crown employees’ foreign service allowances

            11. Section 300: Consuls

            12. Section 301: Official agents

            13. Section 302: Consular employees

            14. Section 303: Visiting forces and staff of designated allied headquarters

            15. Section 304: Experts seconded to European Commission

            16. Section 305: Offshore oil and gas workers: mainland transfers

            17. Section 306: Miners etc.: coal and allowances in lieu of coal

          9. Chapter 9: Exemptions: Pension provision

            1. Section 307: Death or retirement benefit provision

            2. Section 308: Exemption of contributions to approved personal pension arrangements

          10. Chapter 10: Exemptions: Termination of employment

            1. Section 309: Limited exemptions for statutory redundancy payments

            2. Section 310: Counselling and other outplacement services

            3. Section 311: Retraining courses

            4. Section 312: Recovery of tax

          11. Chapter 11: Miscellaneous exemptions

            1. Section 313: Repairs and alterations to living accommodation

            2. Section 314: Council tax etc. paid for certain living accommodation

            3. Section 315: Limited exemption for expenses connected with certain living accommodation

      2. Ne = £10,000; Da = 365; De = 365; Smg = 0

      3. Ne = £10,000; Da = 183; De = 365; Smg = 0

      4. Ne = £5,000; Da = 183; De = 183; Smg = 0

        1. Section 316: Accommodation, supplies and services used in employment duties

        2. Section 317: Subsidised meals

        3. Section 318: Care for children

        4. Section 319: Mobile telephones

        5. Section 320: Limited exemption for computer equipment

        6. Section 321: Suggestion awards

        7. Section 322: Suggestion awards: “the permitted maximum”

        8. Section 323: Long service awards

        9. Section 324: Small gifts from third parties

        10. Section 325: Overseas medical treatment

        11. Section 326: Expenses incidental to transfer of a kind not normally met by transferor

        12. Part 5: Employment income: deductions allowed from earnings

          1. Background

          2. Overview

            1. Chapter 1: Deductions allowed from earnings: general rules

              1. Overview

                1. Section 327: Deductions from earnings: general

                2. Section 328: The income from which deductions may be made

                3. Section 329: Deductions from earnings not to exceed earnings

                4. Section 330: Prevention of double deductions

                5. Section 331: Order for making deductions

                6. Section 332: Meaning of “the deductibility provisions”

            2. Chapter 2: Deductions for employee’s expenses

              1. Overview

                1. Section 333: Scope of this Chapter: expenses paid by the employee

                2. Section 334: Effect of reimbursement etc.

                3. Section 335: Application of deductions provisions: “earnings charged on receipt” and “earnings charged on remittance”

                4. Section 336: Deductions for expenses: the general rule

                5. Section 337: Travel in performance of duties

                6. Section 338: Travel for necessary attendance

                7. Section 339: Meaning of “workplace” and “permanent workplace”

                8. Section 340: Travel between group employments

                9. Section 341: Travel at start or finish of overseas employment

                10. Section 342: Travel between employments where duties performed abroad

          3. Fees and Subscriptions

            1. Overview

              1. Section 343: Deduction for professional membership fees

              2. Section 344: Deduction for annual subscriptions

              3. Section 345: Decisions of the Inland Revenue under section 344

              4. Section 346: Deduction for employee liabilities

              5. Section 347: Payments made after leaving the employment

              6. Section 348: Liabilities related to the employment

              7. Section 349: Meaning of “qualifying insurance contract”

              8. Section 350: Connected contracts

              9. Section 351: Expenses of ministers of religion

              10. Section 352: Limited deduction for agency fees paid by entertainers

              11. Section 353: Deductions from earnings charged on remittance

              12. Section 354: Disallowance of expenses relating to earnings taxed on different basis or untaxed

          4. Example

            1. Section 355: Deduction for corresponding payments by non-domiciled employees with foreign employers

            2. Section 356: Disallowance of business entertainment and gifts expenses

            3. Section 357: Business entertainment and gifts: exception where employer’s expenses disallowed

            4. Section 358: Business entertainment and gifts: other exceptions

            5. Section 359: Disallowance of travel expenses: mileage allowances and reliefs

            6. Section 360: Disallowance of certain accommodation expenses of MPs and other representatives

            7. Chapter 3: Deductions from benefits code earnings

              1. Overview

                1. Section 361: Scope of this Chapter: cost of benefits deductible as if paid by employee

                2. Section 362: Deductions where non-cash voucher provided

                3. Section 363: Deductions where credit-token provided

                4. Section 364: Deductions where living accommodation provided

                5. Section 365: Deductions where employment-related benefit provided

            8. Chapter 4: Fixed allowances for employee’s expenses

              1. Overview

                1. Section 366: Scope of this Chapter: amounts fixed by Treasury

                2. Section 367: Fixed sum deductions for repairing and maintaining work equipment

                3. Section 368: Fixed sum deductions from earnings payable out of public revenue

            9. Chapter 5: Deductions for earnings representing benefits or reimbursed expenses

              1. Background

          5. Overview

            1. Section 369: Scope of this Chapter: earnings representing benefits or reimbursed expenses

          6. Travel costs and expenses where duties performed abroad

            1. Section 370: Travel costs and expenses where duties performed abroad: employee’s travel

            2. Section 371: Travel costs and expenses where duties performed abroad: visiting spouse’s or child’s travel

            3. Section 372: Where seafarers’ duties are performed

          7. Travel costs and expenses of non-domiciled employees where duties performed in UK

            1. Section 373: Non-domiciled employee’s travel costs and expenses where duties performed in UK

            2. Section 374: Non-domiciled employee’s spouse’s or child’s travel costs and expenses where duties performed in UK

            3. Section 375: Meaning of “qualifying arrival date”

            4. Section 376: Foreign accommodation and subsistence costs and expenses (overseas employments)

            5. Section 377: Costs and expenses in respect of personal security assets and services

            6. Chapter 6: Deductions from seafarers’ earnings

              1. Section 378: Deduction from seafarers’ earnings: eligibility

              2. Section 379: Calculating the deduction

              3. Section 380: Limit on deduction where UK duties etc. make amount unreasonable

              4. Section 381: Taking account of other deductions

              5. Section 382: Duties on board ship

              6. Section 383: Place of performance of incidental duties

              7. Section 384: Meaning of employment “as a seafarer”

              8. Section 385: Meaning of “ship”

        13. Part 6: Employment income: income which is not earnings or share-related

          1. Chapter 1: Payments to non-approved pension schemes

            1. Overview

              1. Section 386: Charge on payments to non-approved retirement benefits schemes

              2. Section 387: Meaning of “non-approved retirement benefits scheme”

              3. Section 388: Apportionment of payments in respect of more than one employee

              4. Section 389: Exception: employments where earnings charged on remittance

              5. Section 390: Exception: non-domiciled employees with foreign employers

              6. Section 391: Exception: seafarers with overseas earnings

              7. Section 392: Relief where no benefits are paid or payable

          2. Chapter 2: Benefits from non-approved schemes

            1. Overview

              1. Section 393: Application of this Chapter

              2. Section 394: Charge on benefit to which this Chapter applies

              3. Section 395: Application of sections 396 and 397: general rules

              4. Section 396: Certain lump sums not taxed by virtue of section 394

              5. Section 397: Certain lump sums: calculation of amount taxed by virtue of section 394

              6. Section 398: Valuation of benefits

              7. Section 399: Employment-related loans: interest treated as paid

              8. Section 400: Interpretation

          3. Chapter 3: Payments and benefits on termination of employment etc.

            1. Overview

              1. Section 401: Application of this Chapter

              2. Section 402: Meaning of “benefit”

              3. Section 403: Charge on payment or other benefit

              4. Section 404: How the £30,000 threshold applies

              5. Section 405: Exception for certain payments exempted when received as earnings.

              6. Section 406: Exception for death or disability payments and benefits

              7. Section 407: Exception for payments and benefits under tax-exempt pension schemes

              8. Section 408: Exception for contributions to tax-exempt pension schemes

              9. Section 409: Exception for payments and benefits in respect of employee liabilities and indemnity insurance

              10. Section 410: Exception for payments and benefits in respect of employee liabilities and indemnity insurance: individual deceased

              11. Section 411: Exception for payments and benefits for forces

              12. Section 412: Exception for payments and benefits provided by foreign governments etc.

              13. Section 413: Exception in certain cases of foreign service

              14. Section 414: Reduction in other cases of foreign service

              15. Section 415: Valuation of benefits

              16. Section 416: Notional interest treated as paid if amount charged for beneficial loan

        14. Part 7: Employment income: share-related income and exemptions

          1. Overview

          2. Background

          3. Arrangement of material for share schemes

            1. Chapter 1: Introduction

              1. Overview

                1. Section 417: Scope of Part 7

                2. Section 418: Other provisions about share-related income and exemptions

                3. Section 419: Duties to provide information

                4. Section 420: Negative amounts treated as nil

                5. Section 421: Application of Part 7 to office-holders

            2. Chapter 2: Conditional interests in shares

              1. Overview

                1. Section 422: Application of this Chapter

                2. Section 423: Interests in shares acquired “as a director or employee”

                3. Section 424: Meaning of interest being “only conditional”

                4. Section 425: Cases where this Chapter does not apply

                5. Section 426: No charge in respect of acquisition of employee’s interest in certain circumstances

                6. Section 427: Charge on interest in shares ceasing to be only conditional or on disposal

                7. Section 428: Amount of charge

                8. Section 429: Amount or value of consideration given for employee’s interest

                9. Section 430: Amount or value of consideration given for right to acquire shares

                10. Section 431: Application of this Chapter where employee dies

                11. Section 432: Duty to notify provision of conditional interests in shares

                12. Section 433: Duty to notify events resulting in charges under section 427

                13. Section 434: Minor definitions

            3. Chapter 3: Convertible shares

              1. Overview

                1. Section 435: Application of this Chapter

                2. Section 436: Shares acquired “as a director or employee”

                3. Section 437: Cases where this Chapter does not apply

                4. Section 438: Charge on conversion of shares

                5. Section 439: Amount of charge

                6. Section 440: Case outside charge under section 438: conversion of entire class

                7. Section 441: Case outside charge under section 438: acquisition of conditional interest

                8. Section 442: Amount or value of consideration given for shares or conversion

                9. Section 443: Amount or value of consideration given for right to acquire shares

                10. Section 444: Conversion in consequence of employee’s death

                11. Section 445: Duty to notify conversions of shares

                12. Section 446: Minor definitions

            4. Chapter 4 – Post-acquisition benefits from shares

              1. Overview

                1. Section 447: Application of this Chapter

                2. Section 448: Cases where this Chapter does not apply

                3. Section 449: Charge on occurrence of chargeable event

                4. Section 450: Chargeable events

                5. Section 451: Amount of charge

                6. Section 452: Cases outside charge under section 449

                7. Section 453: Charge on increase in value of shares of dependent subsidiary

                8. Section 454: Chargeable increases

                9. Section 455: Amount of charge

                10. Section 456: Cases outside charge under section 453

                11. Section 457: Charge on other chargeable benefits from shares

                12. Section 458: Chargeable benefits

                13. Section 459: Amount of charge

                14. Section 460: Cases outside charge under section 457

                15. Section 461: Related acquisitions of additional shares

                16. Section 462: Company reorganisations etc.

                17. Section 463: Disposals of shares to connected persons etc. ignored

                18. Section 464: Application to interests in shares

                19. Section 465: Duty to notify acquisitions of shares or interests in shares

                20. Section 466: Duty to notify chargeable events and chargeable benefits

                21. Section 467: Meaning of “dependent subsidiary”

                22. Section 468: Meaning of “employee-controlled”

                23. Section 469: Shares “held by outside shareholders”

                24. Section 470: Minor definitions

            5. Chapter 5: Share options

              1. Overview

                1. Section 471: Share options to which this Chapter applies

                2. Section 472: Introduction to taxation of share options

                3. Section 473: Share options to which this Chapter does not apply

                4. Section 474: No charge in respect of receipt of shorter-term option

                5. Section 475: Value of longer-term option for purposes of liability to tax in respect of receipt

                6. Section 476: Charge on exercise, assignment or release of option by employee

                7. Section 477: Charge on employee where option exercised, assigned or released by another person

                8. Section 478: Amount of charges

                9. Section 479: Amount of gain realised by exercising option

                10. Section 480: Amount of gain realised by assigning or releasing option

                11. Section 481: Deductible amount in respect of secondary Class 1 contributions met by employee

                12. Section 482: Deductible amount in respect of special contribution met by employee

                13. Section 483: Extended meaning of “assign” and “release”

                14. Section 484: Amount or value of consideration given for grant of share option

                15. Section 485: Application of this Chapter where share option exchanged for another

                16. Section 486: Duty to notify matters relating to share options

                17. Section 487: Minor definitions

            6. Chapter 6: Approved share incentive plans

              1. Background

          4. Overview

            1. Section 488: Approved share incentive plans (SIPs)

          5. The tax advantages

            1. Section 489: Operation of tax advantages in connection with approved SIP

            2. Section 490: No charge on award or acquisition of shares: general

            3. Section 491: No charge on award of shares as taxable benefit

            4. Section 492: No charge on partnership share money deducted from salary

            5. Section 493: No charge on acquisition of dividend shares

            6. Section 494: No charge on removal of restrictions applying to shares

            7. Section 495: No charge on increase in value of shares of dependent subsidiary

            8. Section 496: No charge on cash dividend retained for reinvestment

            9. Section 497: Limitations on charges on shares ceasing to be subject to plan

            10. Section 498: No charge on shares ceasing to be subject to plan in certain circumstances

            11. Section 499: No charge in respect of incidental expenditure

          6. The charges to tax

            1. Section 500: Operation of tax charges in connection with approved SIP

            2. Section 501: Charge on capital receipts in respect of plan shares

            3. Section 502: Meaning of “capital receipt” in section 501

            4. Section 503: Charge on partnership share money paid over to employee

            5. Section 504: Charge on cancellation payments in respect of partnership share agreement

            6. Section 505: Charge on free or matching shares ceasing to be subject to plan

            7. Section 506: Charge on partnership shares ceasing to be subject to plan

            8. Section 507: Charge on disposal of beneficial interest during holding period

            9. Section 508: Identification of shares ceasing to be subject to plan

          7. PAYE implications

            1. Section 509: Modification of section 696 where charge on shares ceasing to be subject to plan

            2. Section 510: Payments by trustees to employer company on shares ceasing to be subject to plan

            3. Section 511: PAYE deductions to be made by trustees on shares ceasing to be subject to plan

            4. Section 512: Disposal of beneficial interest by participant

            5. Section 513: Capital receipts: payments by trustees to employer company

            6. Section 514: Capital receipts: PAYE deductions to be made by trustees

            7. Section 515: Tax advantages and charges under other Acts

            8. Chapter 7: Approved SAYE option schemes

              1. Overview

                1. Section 516: Approved SAYE option schemes

                2. Section 517: Share options to which this Chapter applies

                3. Section 518: No charge in respect of receipt of option

                4. Section 519: No charge in respect of exercise of option

                5. Section 520: No charge in respect of post-acquisition benefits

            9. Chapter 8: Approved CSOP schemes

              1. Overview

                1. Section 521: Approved CSOP Schemes

                2. Section 522: Share options to which this Chapter applies

                3. Section 523: No charge in respect of receipt of option

                4. Section 524: No charge in respect of exercise of option

                5. Section 525: No charge in respect of post-acquisition benefits

                6. Section 526: Charge where option granted at a discount

            10. Chapter 9: Enterprise management incentives

              1. Overview

                1. Section 527: Enterprise management incentives: qualifying options

                2. Section 528: No charge on receipt of qualifying option

                3. Section 529: Scope of tax advantages: option must be exercised within 10 years

                4. Section 530: No charge on exercise of option to acquire shares at market value

                5. Section 531: Limitation of charge on exercise of option to acquire shares below market value

                6. Section 532: Modified tax consequences following disqualifying events

                7. Section 533: Disqualifying events

                8. Section 534: Disqualifying events relating to relevant company

                9. Section 535: Disqualifying events relating to employee

                10. Section 536: Other disqualifying events

                11. Section 537: Alterations of share capital for purposes of section 536

                12. Section 538: Share conversions excluded for purposes of section 536

                13. Section 539: CSOP and other options relevant for purposes of section 536

                14. Section 540: No charge on acquisition of shares as taxable benefit

                15. Section 541: Effects on other income tax charges

            11. Chapter 10: Priority share allocations

              1. Overview

                1. Section 542: Exemption: offer made to public and employees

                2. Section 543: Discount not covered by exemption in section 542

                3. Section 544: Exemption: different offers made to public and employees

                4. Section 545: Discount not covered by exemption in section 544

                5. Section 546: Meaning of being entitled “on similar terms”

                6. Section 547: Meaning and amount or value of “registrant discount”

                7. Section 548: Minor definitions

            12. Chapter 11: Supplementary Provisions about employee benefit trusts

              1. Background

          8. Overview

            1. Section 549: Application of this Chapter

            2. Section 550: Meaning of “employee benefit trust”

            3. Section 551: “Qualifying disposals” for purposes of section 550

            4. Section 552: Attribution of interest in company to beneficiary or associate

            5. Section 553: Meaning of “appropriate percentage” for purposes of section 552

            6. Section 554: Attribution of further interest in company

        15. Part 8: Former employees: deductions for liabilities

          1. Overview

            1. Section 555: Former employee entitled to deduction from total income

            2. Section 556: Deductible payments made outside the time limits allowed

            3. Section 557: Deductible payments wholly or partly borne by the former employer etc.

            4. Section 558: Meaning of “deductible payment”

            5. Section 559: Liabilities related to the former employment

            6. Section 560: Meaning of “qualifying insurance contract”

            7. Section 561: Connected contracts

            8. Section 562: Meaning of “former employee” and “employment”

            9. Section 563: Other interpretation

            10. Section 564: Application of this Part to office-holders

        16. Part 9: Pension Income

          1. Overview

            1. Chapter 1: Introduction

              1. Overview

                1. Section 565: Structure of Part 9

            2. Chapter 2: Tax on pension income

              1. Overview

                1. Section 566: Nature of charge to tax on pension income and relevant definitions

                2. Section 567: Amount charged to tax

                3. Section 568: Person liable for tax

            3. Chapter 3: United Kingdom pensions: general rules

              1. Overview

                1. Section 569: United Kingdom pensions

                2. Section 570: “Pension”: interpretation

                3. Section 571: Taxable pension income

                4. Section 572: Person liable for tax

            4. Chapter 4: Foreign Pensions: general rules

              1. Overview

                1. Section 573: Foreign pensions

                2. Section 574: “Pension”: interpretation

                3. Section 575: Taxable pension income

                4. Section 576: Person liable for tax

            5. Chapter 5: United Kingdom social security pensions

              1. Overview

                1. Section 577: United Kingdom social security pensions

                2. Section 578: Taxable pension income

                3. Section 579: Person liable for tax

            6. Chapter 6: Approved retirement benefits schemes

              1. Overview

                1. Section 580: Pensions and annuities

                2. Section 581: Taxable pension income

                3. Section 582: Person liable for tax

                4. Section 583: Unauthorised payments

                5. Section 584: Taxable pension income

                6. Section 585: Person liable for tax

                7. Section 586: Meaning of “retirement benefits scheme” etc.

                8. Section 587: Application to marine pilots’ benefit fund

                9. Section 588: Meaning of “employee” and “ex-spouse”

                10. Section 589: Regulations

            7. Chapter 7: Former approved superannuation funds

              1. Overview

                1. Section 590: Annuities

                2. Section 591: Taxable pension income

                3. Section 592: Person liable for tax

                4. Section 593: Unauthorised payments: application of section 583

                5. Section 594: Meaning of “former approved superannuation fund”

            8. Chapter 8: Approved personal pension schemes

              1. Overview

                1. Section 595: Annuities

                2. Section 596: Taxable pension income

                3. Section 597: Person liable for tax

                4. Section 598: Income withdrawals

                5. Section 599: Taxable pension income

                6. Section 600: Person liable for tax

                7. Section 601: Unauthorised personal pension payments

                8. Section 602: Taxable pension income

                9. Section 603: Person liable for tax

                10. Section 604: Meaning of “personal pension scheme” and related expressions

            9. Chapter 9: Retirement annuity contracts

              1. Overview

                1. Section 605: Annuities

                2. Section 606: Meaning of “retirement annuity contract”

                3. Section 607: Taxable pension income

                4. Section 608: Person liable for tax

            10. Chapter 10: Other employment-related annuities

              1. Overview

                1. Section 609: Annuities for the benefit of dependants

                2. Section 610: Annuities under sponsored superannuation schemes

                3. Section 611: Annuities in recognition of another’s services

                4. Section 612: Taxable pension income: UK annuities

                5. Section 613: Taxable pension income: foreign annuities

                6. Section 614: Person liable for tax

            11. Chapter 11: Certain overseas government pensions paid in the UK

              1. Overview

                1. Section 615: Certain overseas government pensions paid in the United Kingdom

                2. Section 616: Taxable pension income

                3. Section 617 Deduction allowed from taxable pension income

                4. Section 618: Person liable for tax

            12. Chapter 12: House of Commons Members’ Fund

              1. Overview

                1. Section 619: The House of Commons Members’ Fund

                2. Section 621: Taxable pension income

                3. Section 622: Person liable for tax

            13. Chapter 13: Return of surplus employee additional voluntary contributions

              1. Overview

                1. Section 623: Return of surplus employee additional voluntary contributions

                2. Section 624: Taxable pension income

                3. Section 625: Person liable for tax

                4. Section 627: Meaning of “grossing up”

                5. Section 628: Interpretation

            14. Chapter 14: Pre-1973 pensions paid under the Overseas Pensions Act 1973

              1. Overview

                1. Section 629: Pre-1973 pensions paid under the Overseas Pensions Act 1973

                2. Section 630: Interpretation

                3. Section 631: Taxable pension income

                4. Section 632: Person liable for tax

            15. Chapter 15: Voluntary annual payments

              1. Overview

                1. Section 633: Voluntary annual payments

                2. Section 634: Taxable pension income: UK voluntary annual payments

                3. Section 635: Taxable pension income: foreign voluntary annual payments

                4. Section 636: Person liable for tax

            16. Chapter 16: Exemption for certain lump sums

              1. Overview

                1. Section 637: Exemption for lump sums provided under certain pension schemes etc.

            17. Chapter 17: Exemptions: any taxpayer

              1. Overview

                1. Section 638: Awards for bravery

                2. Section 639: Pensions in respect of death due to military or war service

                3. Section 640: Exemption under section 639 where income withheld

                4. Section 641: Wounds and disability pensions

                5. Section 642: Compensation for National-Socialist persecution

                6. Section 643: Malawi, Trinidad and Tobago and Zambia government pensions

                7. Section 644: Pensions payable where employment ceased due to disablement

                8. Section 645: Social security pensions: increases in respect of children

                9. Section 646: Former miners etc: coal and allowances in lieu of coal

            18. Chapter 18: Exemptions: Non-UK resident taxpayers

              1. Overview

                1. Section 647: Introduction and meaning of “foreign residence condition” etc.

                2. Section 648: The Central African Pension Fund

                3. Section 649: Commonwealth government pensions

                4. Section 650: Oversea Superannuation Scheme

                5. Section 651: Overseas Pensions Act 1973

                6. Section 652: Overseas Service Act 1958

                7. Section 653: Overseas Service Pensions Fund

                8. Section 654: The Pensions (India, Pakistan and Burma) Act 1955

        17. Part 10: Social security income

          1. Overview

            1. Chapter 1: Introduction

              1. Overview

                1. Section 655: Structure of Part 10

            2. Chapter 2: Tax on social security income

              1. Overview

                1. Section 656: Nature of charge to tax on social security income

                2. Section 657: Meaning of “social security income”, “taxable benefits” etc.

                3. Section 658: Amount charged to tax

                4. Section 659: Person liable for tax

            3. Chapter 3: Taxable UK social security benefits

              1. Overview

                1. Section 660: Taxable benefits: UK benefits – Table A

                2. Section 661: Taxable social security income

                3. Section 662: Person liable for tax

            4. Chapter 4 Taxable UK social security benefits: exemptions

              1. Overview

                1. Section 663: Long-term incapacity benefit: previous entitlement to invalidity benefit

                2. Section 664: Short-term incapacity benefit not payable at the higher rate

          2. Income support

            1. Section 665: Exempt unless payable to member of couple involved in trade dispute

            2. Section 666: Child maintenance bonus

            3. Section 667: Amounts in excess of taxable maximum

            4. Section 668: Taxable maximum

            5. Section 669: Interpretation

          3. Jobseeker’s allowance

            1. Section 670: Child maintenance bonus

            2. Section 671: Amounts in excess of taxable maximum

            3. Section 672: Taxable maximum: general

            4. Section 673: Taxable maximum: income-based jobseeker’s allowance

            5. Section 674: Taxable maximum: contribution-based jobseeker’s allowance

            6. Section 675: Interpretation

            7. Section 676: Increases in respect of children

            8. Chapter 5: UK social security benefits wholly exempt from income tax

              1. Overview

                1. Section 677: UK social security benefits wholly exempt from tax: Table B

            9. Chapter 6: Taxable foreign benefits

              1. Overview

                1. Section 678: Taxable benefits: foreign benefits

                2. Section 679: Taxable social security income

                3. Section 680: Person liable for tax

            10. Chapter 7: Taxable and other foreign benefits: exemptions

              1. Overview

                1. Section 681: Taxable and other foreign benefits: exemptions

        18. Part 11: Pay As You Earn

          1. Overview

    4. Approach taken in Part 11

    5. Added material

    6. Omitted material

      1. Section 139(4) of FA 1994

      2. Section 205(1) to (3) and (5) of ICTA

    7. Background

    8. History

    9. Income Tax (Employments) Act 1943 (6&7 Geo. 6. (1942-43) c.45)

    10. Regulations of Commissioners of Inland Revenue

    11. The Income Tax (Offices and Employments) Act 1944 (7&8 Geo. 6. (1943-44) c.12)

      1. Extension of principal Act (subject to exceptions) to all emoluments taxable under Schedule E

        1. The scope of PAYE

        2. What is and is not a payment for PAYE

        3. Machinery of PAYE

          1. Chapter 1: Introduction

            1. Overview

              1. Section 682: Scope of this Part

              2. Section 683: PAYE Income

          2. Chapter 2: PAYE: general

            1. Overview

              1. Section 684: PAYE regulations

              2. Section 685: Tax tables

              3. Section 686: Meaning of “payment”

          3. Chapter 3 PAYE: special types of payer or payee

            1. Overview

              1. Section 687: Payments by intermediary

              2. Section 688: Agency workers

              3. Section 689: Employee of non-UK employer

              4. Section 690: Employee non-resident etc.

              5. Section 691: Mobile UK workforce

              6. Section 692: Organised arrangements for sharing tips

          4. Chapter 4: PAYE: special types of income

            1. Overview

              1. Section 693: Cash vouchers

              2. Section 694: Non-cash vouchers

              3. Section 695: Credit-tokens

              4. Section 696: Readily convertible assets

              5. Section 697: Enhancing the value of an asset

              6. Section 698: PAYE: shares ceasing to be only conditional or being disposed of

              7. Section 699: PAYE: conversion of shares

              8. Section 700: PAYE: gains from share options

              9. Section 701: Meaning of “asset”

              10. Section 702: Meaning of “readily convertible asset”

          5. Chapter 5: PAYE settlement agreements

            1. Overview

    12. Omitted material

      1. Section 703: Introduction

      2. Section 704: Sums payable by employers under agreements

      3. Section 705: Approximations allowed in calculations

      4. Section 706: Exclusions of general earnings from income etc.

      5. Section 707: Interpretation of this Chapter

      6. Chapter 6: Miscellaneous and supplemental

        1. Overview

          1. Section 708: PAYE repayments

          2. Section 709: Additional provision for certain assessments

          3. Section 710: Notional payments: accounting for tax

          4. Section 711: Right to make a return

          5. Section 712: Interpretation of this Part

      7. Part 12: Payroll giving

        1. Overview

          1. Section 713: Donations to charity: payroll deduction scheme

          2. Section 714: Meaning of “donations”

          3. Section 715: Approval of schemes: regulation by Treasury

      8. Part 13: Supplementary provisions

        1. Section 716: Alteration of amounts by Treasury order

        2. Section 717: Orders and regulations made by Treasury or Board

        3. Section 718: Connected persons

        4. Section 719: Control in relation to a body corporate

        5. Section 720: Meaning of “the Inland Revenue” etc.

        6. Section 721: Other definitions

        7. Section 722: Consequential amendments

        8. Section 723: Commencement and transitional provisions and savings

        9. Section 724: Repeals and revocations

        10. Section 725: Citation

      9. Schedule 1: Abbreviations and Defined Expressions

        1. Part 1: Abbreviations of Acts and instruments

        2. Part 2: Index of defined expressions

      10. Schedule 2: Approved Share Incentive Plans

        1. Overview

          1. Part 1: Introduction

            1. Paragraph 1: Approval of share incentive plans (SIPs)

            2. Paragraph 2: SIPs: free shares and partnership shares

            3. Paragraph 3: Matching shares

            4. Paragraph 4: Group plans

            5. Paragraph 5: Meaning of “award of shares”, “participant” etc.

          2. Part 2: General requirements

            1. Paragraph 6: General requirements for approval: introduction

            2. Paragraph 7: The purpose of the plan

            3. Paragraph 8: All-employee nature of plan

            4. Paragraph 9: Participation on same terms

            5. Paragraph 10: No preferential treatment for directors and senior employees

            6. Paragraph 11: No further conditions

            7. Paragraph 12: No loan arrangements

          3. Part 3: Eligibility of individuals

            1. Paragraph 13: Eligibility of individuals: introduction

            2. Paragraph 14: Time of eligibility to participate

            3. Paragraph 15: The employment requirement

            4. Paragraph 16: Qualifying periods

            5. Paragraph 17: Meaning of “qualifying company”

            6. Paragraph 18: Requirement not to participate in other SIPs

            7. Paragraph 19: The “no material interest” requirement

            8. Paragraph 20: Meaning of “material interest”

            9. Paragraph 21: Material interest: options and interests in SIPs

            10. Paragraph 22: Meaning of “associate”

            11. Paragraph 23: Meaning of “associate”: trustees of employee benefit trust

            12. Paragraph 24: Meaning of “associate”: trustees of discretionary trust

          4. Part 4: Types of shares that may be awarded

            1. Paragraph 25: Types of shares that may be awarded: introduction

            2. Paragraph 26: Shares must be part of ordinary share capital of certain companies

            3. Paragraph 27: Requirement as to listing etc.

            4. Paragraph 28: Shares must be fully paid up and not redeemable

            5. Paragraph 29: Prohibited shares

            6. Paragraph 30: Only certain kinds of restriction allowed

            7. Paragraph 31: Permitted restrictions: voting rights

            8. Paragraph 32: Permitted restrictions: provision for forfeiture

            9. Paragraph 33: Permitted restrictions: pre-emption conditions

          5. Part 5: Free shares

            1. Paragraph 34: Free shares: introduction

            2. Paragraph 35: Maximum annual award

            3. Paragraph 36: The holding period

            4. Paragraph 37: Holding period: power of participant to direct trustees to accept general offers etc.

            5. Paragraph 38: Performance allowances: general application

            6. Paragraph 39: Performance allowances: targets and measures

            7. Paragraph 40: Performance allowances: information to be given to employees

            8. Paragraph 41: Performance allowances: method one

            9. Paragraph 42: Performance allowances: method two

          6. Part 6: Partnership shares

            1. Paragraph 43: Partnership shares: introduction

            2. Paragraph 44: Partnership share agreements

            3. Paragraph 45: Deductions from salary

            4. Paragraph 46: Maximum amount of deductions

            5. Paragraph 47: Minimum amount of deductions

            6. Paragraph 48: Notice of possible effect of deductions on benefit entitlement

            7. Paragraph 49: Partnership share money held for employee

            8. Paragraph 50: Application of money deducted where no accumulation periods

            9. Paragraph 51: Accumulation periods

            10. Paragraph 52: Application of money deducted in accumulation period

            11. Paragraph 53: Restriction on number of shares awarded

            12. Paragraph 54: Stopping and re-starting deductions

            13. Paragraph 55: Withdrawal from partnership share agreement

            14. Paragraph 56: Repayment of partnership share money on withdrawal of approval or termination

            15. Paragraph 57: Access to partnership shares

          7. Part 7: Matching shares

            1. Paragraph 58: Matching shares: introduction

            2. Paragraph 59: General requirements for matching shares

            3. Paragraph 60: Ratio of matching shares to partnership shares

            4. Paragraph 61: Holding period for matching shares

          8. Part 8: Cash dividends and dividend shares

            1. Paragraph 62: Reinvestment of cash dividends

            2. Paragraph 63: Requirements to be met as regards cash dividends

            3. Paragraph 64: Limit on amount reinvested

            4. Paragraph 65: General requirements as to dividend shares

            5. Paragraph 66: Acquisition of dividend shares

            6. Paragraph 67: Holding period for dividend shares

            7. Paragraph 68: Reinvestment: amounts to be carried forward

            8. Paragraph 69: Cash dividends where no requirement to reinvest

          9. Part 9: Trustees

            1. Paragraph 70: Requirements etc. relating to trustees: introduction

            2. Paragraph 71: Establishment of trustees

            3. Paragraph 72: Duty to act in accordance with participant’s directions

            4. Paragraph 73: Duty not to dispose of plan shares

            5. Paragraph 74: Duty to make payments to participants

            6. Paragraph 75: Duty to give notice of award of shares etc.

            7. Paragraph 76: Power of trustees to borrow

            8. Paragraph 77: Power of trustees to raise funds to subscribe for rights issue

            9. Paragraph 78: Acquisition by trustees of shares from employee share ownership trust

            10. Paragraph 79: Meeting by trustees of PAYE obligations

            11. Paragraph 80: Other duties of trustees in relation to tax liabilities

          10. Part 10: Approval of plans

            1. Paragraph 81: Application for approval

            2. Paragraph 82: Appeal against refusal of approval

            3. Paragraph 83: Withdrawal of approval

            4. Paragraph 84: Disqualifying events for purposes of paragraph 83

            5. Paragraph 85: Appeal against withdrawal of approval

          11. Part 11: Supplementary provisions

            1. Paragraph 86: Company reconstructions

            2. Paragraph 87: Consequences of company reconstructions

            3. Paragraph 88: Treatment of shares acquired under rights issue

            4. Paragraph 89: Termination of plan

            5. Paragraph 90: Effect of plan termination notice

            6. Paragraph 91: Jointly owned companies

            7. Paragraph 92: Determination of market value

            8. Paragraph 93: Power to require information

            9. Paragraph 94: Meaning of “associated company”

            10. Paragraph 95: Meaning of participant ceasing to be in relevant employment

            11. Paragraph 96: Meaning of shares being withdrawn from plan

            12. Paragraph 97: Meaning of shares ceasing to be subject to plan

            13. Paragraph 98: Meaning of "the specified retirement age"

            14. Paragraph 99: Minor definitions

            15. Paragraph 100: Index of defined expressions

      11. Schedule 3: Approved Saye Option Schemes

        1. Overview

          1. Part 1: Introduction

            1. Paragraph 1: Approval of SAYE option schemes

            2. Paragraph 2: SAYE option schemes

            3. Paragraph 3: Group schemes

          2. Part 2: General requirements for approval

            1. Paragraph 4: General requirements for approval: introduction

            2. Paragraph 5: General restriction on contents of scheme

            3. Paragraph 6: All-employee nature of scheme

            4. Paragraph 7: Participation on similar terms

            5. Paragraph 8: No preferential treatment for directors and senior employees

          3. Part 3: Eligibility of individuals to participate in scheme

            1. Paragraph 9: Requirements relating to the eligibility of individuals: introduction

            2. Paragraph 10: The employment requirement

            3. Paragraph 11: The “no material interest” requirement

            4. Paragraph 12: Meaning of “material interest”

            5. Paragraph 13: Material Interest: options and interests in SIPs

            6. Paragraph 14: Meaning of “associate”

            7. Paragraph 15: Meaning of “associate”: trustees of employee benefit trust

            8. Paragraph 16: Meaning of “associate”: trustees of discretionary trust

          4. Part 4: Shares to which schemes can apply

            1. Paragraph 17: Requirements relating to shares that may be subject to share options: introduction

            2. Paragraph 18: Shares must be ordinary shares of certain companies

            3. Paragraph 19: Requirements as to listing

            4. Paragraph 20: Shares must be fully paid up and not redeemable

            5. Paragraph 21: Only certain kinds of restriction allowed

            6. Paragraph 22: Requirements as to other shareholdings

          5. Part 5: Requirement for linked savings scheme

            1. Paragraph 23: Requirements as to linked savings scheme: introduction

            2. Paragraph 24: Payment for shares to be linked to approved savings schemes

            3. Paragraph 25: Requirements as to contributions to savings schemes

            4. Paragraph 26: Repayments under a savings scheme: whether bonuses included

          6. Part 6: Requirements etc. relating to share options

            1. Paragraph 27: Requirements etc. relating to share options: introduction

            2. Paragraph 28: Requirements as to price for acquisition of shares

            3. Paragraph 29: Share options must not be transferable

            4. Paragraph 30: Time for exercising options: general

            5. Paragraph 31: Requirement to have a “specified age”

            6. Paragraph 32: Exercise of options: death

            7. Paragraph 33: Exercise of options: reaching specified age without retiring

            8. Paragraph 34: Exercise of options: scheme-related employment ends

            9. Paragraph 35: Time when scheme-related employment ends

            10. Paragraph 36: Exercise of options: employment in associated company at bonus date

            11. Paragraph 37: Exercise of options: company events

          7. Part 7: Exchange of share options

            1. Paragraph 38: Exchange of options on company reorganisation

            2. Paragraph 39: Requirements about share options granted in exchange

          8. Part 8: Approval of schemes

            1. Paragraph 40: Application for approval

            2. Paragraph 41: Appeal against refusal of approval

            3. Paragraph 42: Withdrawal of approval

            4. Paragraph 43: Approval ineffective after unapproved alteration

            5. Paragraph 44: Appeal against withdrawal of approval etc.

          9. Part 9: Supplementary provisions

            1. Paragraph 45: Power to require information

            2. Paragraph 46: Jointly owned companies

            3. Paragraph 47: Meaning of “associated company”

            4. Paragraph 48: Minor definitions

            5. Paragraph 49: Index of defined expressions

      12. Schedule 4: Approved Csop Schemes

        1. Overview

          1. Part 1: Introduction

            1. Paragraph 1: Approval of CSOP schemes

            2. Paragraph 2: CSOP schemes

            3. Paragraph 3: Group Schemes

          2. Part 2: General requirements for approval

            1. Paragraph 4: General requirements for approval: introduction

            2. Paragraph 5: General restriction on contents of scheme

            3. Paragraph 6: Limit on value of shares subject to options

          3. Part 3: Eligibility of Individuals to participate in Scheme

            1. Paragraph 7: Requirements relating to the eligibility of individuals: introduction

            2. Paragraph 8: The employment requirement

            3. Paragraph 9: The “no material interest” requirement

            4. Paragraph 10: Meaning of “material interest”

            5. Paragraph 11: Material Interest: options and interests in SIPs

            6. Paragraph 12: Meaning of “associate”

            7. Paragraph 13: Meaning of “associate”: trustees of employee benefit trust

            8. Paragraph 14: Meaning of “associate”: trustees of discretionary trust

          4. Part 4: Shares to which schemes can apply

            1. Paragraph 15: Requirements relating to shares that may be subject to share options: introduction

            2. Paragraph 16: Shares must be ordinary shares of certain companies

            3. Paragraph 17: Requirements as to listing

            4. Paragraph 18: Shares must be fully paid up and not redeemable

            5. Paragraph 19: Only certain kinds of restriction allowed

            6. Paragraph 20: Requirements as to other shareholdings

          5. Part 5: Requirements etc. relating to share options

            1. Paragraph 21: Requirements etc. relating to share options: introduction

            2. Paragraph 22: Requirements as to price for acquisition of shares.

            3. Paragraph 23: Share options must not be transferable

            4. Paragraph 24: Exercise of options: ceasing to be director or employee

            5. Paragraph 25: Exercise of options: death

          6. Part 6:Exchange of share options

            1. Paragraph 26: Exchange of options on company reorganisation

            2. Paragraph 27: Requirements about share options granted in exchange

          7. Part 7: Approval of schemes

            1. Paragraph 28: Application for approval

            2. Paragraph 29: Appeal against refusal of approval

            3. Paragraph 30: Withdrawal of approval

            4. Paragraph 31: Approval ineffective after unapproved alteration

            5. Paragraph 32: Appeal against withdrawal of approval etc.

          8. Part 8: Supplementary provisions

            1. Paragraph 33: Power to require information

            2. Paragraph 34: Jointly owned companies

            3. Paragraph 35: Meaning of “associated company”

            4. Paragraph 36: Minor definitions

            5. Paragraph 37: Index of defined expressions

      13. Schedule 5: Enterprise Management Incentives

        1. Overview

          1. Part 1: Introduction

            1. Paragraph 1: Enterprise management incentives: qualifying options

            2. Paragraph 2: Meaning of “the relevant company” and “the employer company”

          2. Part 2: General requirements

            1. Paragraph 3: General requirements: introduction

            2. Paragraph 4: Purpose of granting the option

            3. Paragraph 5: Maximum entitlement of employee: financial limit on unexercised options

            4. Paragraph 6: Maximum entitlement of employee: further limit of 3 years

            5. Paragraph 7: Maximum value of options in respect of relevant company’s shares

          3. Part 3: Qualifying companies

            1. Paragraph 8: Qualifying companies: introduction

            2. Paragraph 9: The independence requirement

            3. Paragraph 10: The qualifying subsidiaries requirement

            4. Paragraph 11: Meaning of “qualifying subsidiary”

            5. Paragraph 12: The gross assets requirement

            6. Paragraph 13: The trading activities requirement: single company

            7. Paragraph 14: The trading activities requirement: parent company

            8. Paragraph 15: Meaning of “qualifying trade”

            9. Paragraph 16: Excluded activities

            10. Paragraph 17: Excluded activities: wholesale and retail distribution

            11. Paragraph 18: Excluded activities: leasing of certain ships

            12. Paragraph 19: Excluded activities: receipt of royalties or licence fees

            13. Paragraph 20: Excluded activities: property development

            14. Paragraph 21: Excluded activities: hotels and comparable establishments

            15. Paragraph 22: Excluded activities: nursing homes and residential care homes

            16. Paragraph 23: Excluded activities: provision of facilities for another business

          4. Part 4: Eligible employees

            1. Paragraph 24: Eligible employees: introduction

            2. Paragraph 25: The employment requirement

            3. Paragraph 26: The requirement as to commitment of working time

            4. Paragraph 27: Meaning of “working time”

            5. Paragraph 28: The “no material interest” requirement

            6. Paragraph 29: Meaning of “material interest”

            7. Paragraph 30: Material interest: options and interests in SIPs

            8. Paragraph 31: Meaning of “associate”

            9. Paragraph 32: Meaning of “associate”: trustees of employee benefit trust

            10. Paragraph 33: Meaning of “associate”: trustees of discretionary trust

          5. Part 5: Requirements relating to options

            1. Paragraph 34: Requirements relating to options: introduction

            2. Paragraph 35: Type of shares that may be acquired

            3. Paragraph 36: Option to be capable of exercise within 10 years

            4. Paragraph 37: Terms of option to be agreed in writing

            5. Paragraph 38: Non-assignability of rights

          6. Part 6: Company reorganisations

            1. Paragraph 39: Company reorganisations: introduction

            2. Paragraph 40: Meaning of “qualifying exchange of shares”

            3. Paragraph 41: Grant of replacement option

            4. Paragraph 42: Period within which replacement option must be granted

            5. Paragraph 43: Further requirements to be met as to replacement option

          7. Part 7: Notification of option to Inland Revenue

            1. Paragraph 44: Notice of option to be given to Inland Revenue

            2. Paragraph 45: Correction of notice by Inland Revenue

            3. Paragraph 46: Notice of enquiry

            4. Paragraph 47: Completion of enquiry: closure notices

            5. Paragraph 48: Completion of enquiry: application for closure notice to be given

            6. Paragraph 49: Effect of enquiry

            7. Paragraph 50: Appeals

          8. Part 8: Supplementary provisions

            1. Paragraph 51: Power to require information

            2. Paragraph 52: Annual returns

            3. Paragraph 53: Compliance with time limits

            4. Paragraph 54: Power to amend by Treasury order

            5. Paragraph 55: Meaning of “market value” of shares

            6. Paragraph 56: Determination of market value of shares

            7. Paragraph 57: Appeal against determination of market value of shares

            8. Paragraph 58: Minor definitions

            9. Paragraph 59: Index of defined expressions

      14. Schedule 6: Consequential Amendments

        1. General

          1. Part 1: Income and Corporation Taxes Act 1988

            1. Paragraph 2

            2. Paragraph 4

            3. Paragraph 5

            4. Paragraph 6

            5. Paragraph 10

            6. Paragraph 12

            7. Paragraph 16

            8. Paragraph 22

            9. Paragraph 26

            10. Paragraph 28

            11. Paragraph 34

            12. Paragraph 36

            13. Paragraph 44

            14. Paragraph 47

            15. Paragraph 48

            16. Paragraph 55

            17. Paragraph 65

            18. Paragraphs 67 to 70

            19. Paragraphs 72 and 73

            20. Paragraph 100

            21. Paragraph 108

            22. Paragraph 109

            23. Paragraphs 112 and 113

          2. Part 2: Other enactments

            1. Paragraph 126

            2. Paragraph 127

            3. Paragraph 137

            4. Paragraph 147

            5. Paragraphs 157 and 158

            6. Paragraphs 169 to 185

            7. Paragraphs 190 to 204

            8. Paragraph 210

            9. Paragraph 212

            10. Paragraph 216

            11. Paragraph 217

            12. Paragraph 221

            13. Paragraph 241

            14. Paragraph 257

            15. Paragraphs 268 and 269

      15. Schedule 7: Transitionals and Savings

        1. Part 1: Continuity of the law

          1. Paragraphs 1 to 7

        2. Part 2: Employment income: charge to tax

          1. Paragraph 8

          2. Paragraphs 9 to 11

          3. Paragraph 12

          4. Paragraph 13

          5. Paragraph 14

        3. Part 3: Employment income: earnings and benefits etc. treated as earnings

          1. Paragraph 15

          2. Paragraph 16

          3. Paragraph 17

          4. Paragraph 18

          5. Paragraph 19

          6. Paragraph 20

          7. Paragraph 21

          8. Paragraphs 22

          9. Paragraph 23

          10. Paragraph 24

          11. Paragraph 25

          12. Paragraph 26

          13. Paragraph 27

          14. Paragraph 28

          15. Paragraph 29

          16. Paragraph 30

          17. Paragraph 31

          18. Paragraph 32

        4. Part 4: Employment income: exemptions

          1. Paragraphs 33 and 34

          2. Paragraph 35

          3. Paragraph 36

          4. Paragraph 37

          5. Paragraph 38

        5. Part 5: Employment income: deductions

          1. Paragraph 39

          2. Paragraph 40

        6. Part 6: Employment income: income which is not earnings or share-related

          1. Paragraph 41

          2. Paragraph 42

          3. Paragraph 43

        7. Part 7: Employment income: share-related income

          1. Paragraph 44

          2. Paragraph 45

          3. Paragraph 46

          4. Paragraph 47

          5. Paragraph 48

          6. Paragraph 49

          7. Paragraph 50

          8. Paragraph 51

          9. Paragraph 52

          10. Paragraph 53

          11. Paragraphs 54 to 56

          12. Paragraph 57

          13. Paragraph 58

          14. Paragraph 59

          15. Paragraph 60

          16. Paragraph 61

          17. Paragraph 62

          18. Paragraph 63

          19. Paragraphs 64 to 66

          20. Paragraph 67

          21. Paragraph 68

          22. Paragraph 69

          23. Paragraph 70

          24. Paragraph 71

          25. Paragraph 72

          26. Paragraph 73

          27. Paragraph 74

          28. Paragraph 75

          29. Paragraph  76

          30. Paragraph 77

          31. Paragraph 78

          32. Paragraphs 79 and 80

          33. Paragraph 81

          34. Paragraph 82

          35. Paragraph 83

          36. Paragraph 84

        8. Part 8: Approved profit sharing schemes

          1. Paragraph 85

          2. Paragraph 86

          3. Paragraph 87

        9. Part 9: Social security income

          1. Paragraph 88

        10. Part 10: PAYE

          1. Paragraph 89

        11. Part 11: Consequences for corporation tax

          1. Paragraphs 90 to 92

      16. Schedule 8: Repeals and Revocations

  5. Commencement

  6. Hansard References

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