The Social Security (Contributions) Regulations 2001

Regulation 26

SCHEDULE 3U.K. PAYMENTS TO BE DISREGARDED IN THE CALCULATION OF EARNINGS FOR THE PURPOSES OF EARNINGS-RELATED CONTRIBUTIONS

PART IU.K. INTRODUCTORY

IntroductionU.K.

1.—(1) This Schedule contains provisions about payments which are to be disregarded in the calculation of earnings for the purposes of earnings-related contributions.U.K.

(2) Part II contains provisions about the treatment of payments in kind.

(3) Part III and IV specifies payments by way of assets which are not to be disregarded by virtue of paragraph 1 of Part II.

(4) Part V specifies non-cash vouchers which are to be disregarded by virtue of paragraph 1 of Part II.

(5) In computing earnings there are also to be disregarded—

(a)the pensions and pension contributions specified in Part VI;

(b)the payments in respect of training and similar courses specified in Part VII;

(c)the travelling, relocation and overseas expenses specified in Part VIII;

(d)the [F1incentives by way of securities] specified in Part IX; and

(e)the miscellaneous payments specified in Part X.

InterpretationU.K.

2.—(1) In this Schedule, unless the context otherwise requires—

(a)a reference to a numbered Part is a reference to the Part of this Schedule which bears that number;

(b)a reference in a Part, to a numbered paragraph is a reference to the paragraph of that Part which bears that number; and.

(c)a reference in a paragraph to a lettered or numbered sub-paragraph is a reference to the sub-paragraph of that paragraph which bears that letter or number.

PART IIU.K. PAYMENTS IN KIND

Certain payments in kind to be disregardedU.K.

1.  A payment in kind, or by way of the provision of services, board and lodging or other facilities is to be disregarded in the calculation of earnings.

This is subject to the paragraph 2 and also to any provision about a payment in kind of a particular description or in particular circumstances in any other Part of this Schedule.

Payments by way of assets not to be disregardedU.K.

2.  Payments falling within paragraph 1 do not include any payment by way of—

(a)the conferment of any beneficial interest in—

(i)any asset mentioned in Part III or Part IV,

[F2(ii)any contract of long-term insurance which falls within paragraph I, III or VI of Part II of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001;]

(b)a non-cash voucher not of a description mentioned in Part V or to which paragraph 4 of Part X applies.

(2) Sub-paragraph (1)(a)(i) is subject to the qualification that an asset, which falls within either Part III or Part IV, shall nevertherless be disregarded under paragraph 1 [F3if no liability to income tax arises by virtue of section 323 of ITEPA 2003 (long service awards)].

(3) For the purposes of sub-paragraph (1)(a)(ii), if the [F4contract—

(a)falls within Part II of Schedule 1 to the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001 and Part I of that Schedule; or

(b)is treated for the purposes of that Order as falling within Part II of that Schedule by Article 3(3) of that Order,

that contract shall be treated as a contract of long-term insurance.]

PART IIIU.K. PAYMENTS BY WAY OF READILY CONVERTIBLE ASSETS NOT DISREGARDED AS PAYMENTS IN KIND

[F51.  A readily convertible asset within the meaning of section 702 of ITEPA 2003.]U.K.

[F52.  An asset which, in accordance with section 697 of ITEPA 2003 (PAYE: enhancing the value of an asset), would be treated, for the purposes of section 696 of that Act, as a readily convertible asset.]U.K.

3.  Any voucher, stamp or similar document—U.K.

(a)whether used singularly or together with other such vouchers, stamps or documents; and

(b)which is capable of being exchanged for an asset falling within paragraph 1 or 2.

PART IVU.K. PAYMENTS BY WAY OF SPECIFIC ASSETS NOT DISREGARDED AS PAYMENTS IN KIND

[F6 SecuritiesU.K.

1.  Securities.]

Here “company” includes—

(a)any body corporate constituted under the law of, or of any part of, the United Kingdom or of any other country or territory and also any unincorporated body constituted under the law of a country or territory outside the United Kingdom; and

(b)any body incorporated under the law of, or of any part of, the United Kingdom relating to a building society within the meaning of section119(1) of the Building Societies Act 1986 F7 or an industrial and provident society registered, or deemed to be registered, under the Industrial and Provident Societies Act 1965 F8 or the Industrial and Provident Societies Act (Northern Ireland) 1969 F9.

Certain debentures and other securities for loansU.K.

F102.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Loans stocks of public and local authoritiesU.K.

F103.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Warrants etc for loan stock and debenturesU.K.

F104.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Units in collective investment schemesU.K.

F105.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F10. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Options to acquire assets, currency, precious metals or other optionsU.K.

6.  Options to acquire, or dispose of—

(a)currency of the United Kingdom or any other country or territory;

(b)gold, silver, palladium or platinum;

(c)an asset falling within any other paragraph of this Part of this Schedule;

(d)an option to acquire, or dispose of, an asset falling within sub-paragraph (a), (b) or (c).

Contracts for futuresU.K.

F117.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F11. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Contracts for differences or to secure profit by reference to movements of indicesU.K.

F118.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Alcoholic liquor on which duty has not been paidU.K.

9.  Any alcoholic liquor, within the meaning of section 1 of the Alcoholic Liquor Duties Act 1979 F12 in respect of which no duty has been paid under that Act.

GemstonesU.K.

10.  Any gemstone, including stones such as diamond, emerald, ruby, sapphire, amethyst, jade, opal or topaz and organic gemstones such as amber or pearl, whether cut or uncut and whether or not having an industrial use.

Certificates etc. conferring rights in respect of assetsU.K.

11.  Certificates or other instruments which confer—

(a)property rights in respect of any asset falling within paragraphs [F131], 9 or 10;

(b)any right to acquire, dispose of, underwrite or convert an asset, being a right to which the holder would be entitled if he held any such asset to which the certificate or instrument relates; or

(c)a contractual right, other than an option, to acquire any such asset otherwise than by subscription.

VouchersU.K.

12.  Any voucher, stamp or similar document—

(a)whether used singularly or together with other such vouchers, stamps or documents; and

(b)which is capable of being exchanged for an asset falling within any other paragraph of this Part.

PART VU.K. CERTAIN NON-CASH VOUCHERS TO BE DISREGARDED AS PAYMENTS IN KIND

1.—(1) Subject to sub-paragraph (2), a non-cash voucher provided, to or for the benefit of the employed earner, by the employer or any other person on his behalf is to be disregarded in the calculation of an employed earner’s earnings by virtue of paragraph 1 of Part II only if it falls within any of paragraphs 2 to [F149].U.K.

[F15(2) A non-cash voucher may also be disregarded—

(a)by virtue of paragraph 7D of Part VIII (car fuel); F16...

[F17(aa)by virtue of paragraph 7E of Part 8 (van fuel); or]

(b)in the circumstances specified in paragraph 4 of Part X (payments by way of [F18incidental overnight expenses]).]

2.  A non-cash voucher which is not treated as [F19general earnings] from employment for the purposes of [F20section 86 of ITEPA 2003 (transport vouchers under pre-26th March arrangements).]U.K.

[F21This paragraph only applies in the case of an employee who is in lower paid employment, within the meaning of section 217 of ITEPA 2003]

[F223.  A non-cash voucher exempted from liability to income tax under Chapter 4 of Part 3 by virtue of sections 266(1)(a) or 269 of ITEPA 2003 (exemptions: non-cash vouchers and credit-tokens).]U.K.

F22. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F224.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

[F235.  A non-cash voucher in respect of which no liability to income tax arises by virtue of section 266(1) of ITEPA 2003 to the extent that the voucher is used to obtain anything the direct provision of which would fall within any of the following provisions of that Act—U.K.

(a)section 246 (transport between work and home for disabled employees: general);

(b)section 247 (provision of cars for disabled employees);

(c)section 248 (transport home: late night working and failure of car-sharing arrangements)[F24;

[F25(d)section 320C (recommended medical treatment).]]

5A.  A non-cash voucher in respect of which no liability to income tax arises by virtue of section 266(2) of ITEPA 2003 if the voucher evidences entitlement to use anything the direct provision of which would fall within any of the following provisions of that Act—U.K.

(a)section 242 (works transport services);

(b)section 243 (support for public bus services);

(c)section 244 (cycles and cyclist’s safety equipment);

[F26(d)section 319 (mobile telephones).]

5B.  A non-cash voucher in respect of which no liability to income tax arises by virtue of section 266(3) of ITEPA 2003 if the voucher can be used only to obtain anything the direct provision of which would fall within any of the following provisions of that Act—U.K.

(a)section 245 (travelling and subsistence during public transport strikes);

(b)section 261 (recreational benefits);

(c)section 264 (annual parties and functions);

(d)section 296 (armed forces' leave travel facilities);

(e)section 317 (subsidised meals);

[F27(f)section 320A (eye tests and special corrective appliances).]

6.  A non-cash voucher to the extent that no liability to income tax arises by virtue of any of the following sections of ITEPA 2003—U.K.

(a)section 270 (exemption for small gifts of vouchers and tokens from third parties);

(b)section 305 (offshore oil and gas workers: mainland transfers);

(c)section 321 (suggestion awards);

(d)section 323 (long service awards);

[F28(da)section 323A (trivial benefits provided by employers)]

(e)section 324 (small gifts from third parties).]

Meal vouchersU.K.

F296A.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F30Interpretation – qualifying childcare vouchersU.K.

6B.  In paragraphs 7 and 7A—

(a)“care”, “child” and “parental responsibility” have the same meaning as in section 318B of ITEPA 2003;

(b)“chargeable expense” has the meaning given in paragraph 14 of Schedule 2;

[F31(ba)“eligible employee” has the meaning given in section 270AA of ITEPA 2003;]

(c)“qualifying child care” has the same meaning as in section 318C of ITEPA 2003;

(d)“qualifying week” means a tax week in respect of which a qualifying childcare voucher is received;

(e)“relevant salary sacrifice arrangements” means arrangements (whenever made) under which the employees for whom the vouchers are provided give up the right to receive an amount of general earnings or specific employment income in return for the provision of the vouchers;

(f)“relevant flexible remuneration arrangements” means arrangements (whenever made) under which the employees for whom the vouchers are provided agree with the employer that they are to be provided with the vouchers rather than receive some other description of employment income;

(g)“relevant low-paid employees” means any of the employer’s employees who are remunerated by the employer at a rate such that, if the relevant salary sacrifice arrangements or relevant flexible remuneration arrangements applied to them, the rate at which they would then be so remunerated would be likely to be lower than the national minimum wage;

(h)“scheme” means the manner by which an employer provides qualifying childcare vouchers and an employee is taken to join a scheme or have joined a scheme when the employer has agreed that vouchers will be provided to the employee under the scheme and there is a child falling within Condition A of paragraph 7(7); and

(i)the administration costs for a voucher means the difference between the cost of provision of a voucher and its face value and the face value is the amount stated on or recorded in the voucher as the value of the provision of care for a child that may be obtained by using it.]

[F32[F33Qualifying childcare vouchers for [F34eligible] employees who joined a scheme before 6th April 2011]U.K.

7.—(1) [F35A qualifying childcare voucher, where an [F36eligible] employee joined a scheme—

(a)before 6th April 2011;

(b)before 6th April 2011 but ceased to be employed by the employer and was subsequently re-employed by the employer and re-joined the scheme before 6th April 2011; or

(c)before 6th April 2011 and there was a continuous period of 52 weeks ending before 6th April 2011 throughout which vouchers were not being provided for the employee under the scheme,

subject to the qualifications in sub-paragraphs (2) and (5).]

F37[F38(1A)] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(2) Where the chargeable expense of the voucher exceeds the exempt amount, only that amount shall be disregarded by virtue of sub-paragraph (1).

(3) The exempt amount is the amount found by the formula—

(4) Where an earner has two or more employed earner's employments, the earnings from which fall to be aggregated in accordance with regulation 14 or 15, the reference to the secondary contributor in paragraph (b) of the definition of QW is a reference to the secondary contributor in respect any of those employments.

(5) An earner is only entitled to one exempt amount even if childcare vouchers are provided in respect of more than one child.

(6) [F40In this paragraph “qualifying childcare voucher” means a non-cash voucher in relation to which Conditions A to C are met.]

[F41(7) Condition A is that the voucher is provided to enable an employee to obtain care for a child who—

(a)is a child or stepchild of the employee and is maintained (wholly or partly) at the employee’s expense; or

(b)is resident with the employee and is a person in respect of whom the employee has parental responsibility.

(8) Condition B is that the voucher can only be used to obtain qualifying child care.

(9) Condition C is that the vouchers are provided under a scheme that is open—

(a)to the employer’s [F42eligible] employees generally; or

(b)generally to those at a particular location,

subject to sub-paragraph (10).

(10) Where the scheme under which the vouchers are provided involves—

(a)relevant salary sacrifice arrangements; or

(b)relevant flexible remuneration arrangements,

Condition C is not prevented from being met by reason only that the scheme is not open to relevant low-paid employees.]]

[F43[F44Qualifying childcare vouchers for [F45eligible] employees who joined a scheme on or after 6th April 2011, or before 6th April 2011 where there has been a break in employment or a 52 week break in receiving vouchers recommencing on or after 6th April 2011U.K.

7A.—(1) A qualifying childcare voucher, where an [F46eligible] employee joined a scheme—

(a)on or after 6th April 2011;

(b)before 6th April 2011 but ceased to be employed by the employer and was subsequently re-employed by the employer and re-joined the scheme on or after 6th April 2011; or

(c)before 6th April 2011 and there was a continuous period of 52 weeks ending on or after 6th April 2011 throughout which vouchers were not being provided for the employee under the scheme,

subject to the qualifications in sub-paragraphs (3) and (6).]

(2) In this paragraph a “qualifying childcare voucher” means a non-cash voucher in relation to which conditions A to D (see sub-paragraphs (7) to (11)) are met.

(3) Where the chargeable expense of the voucher exceeds the exempt amount, only that amount shall be disregarded by virtue of sub-paragraph (1).

(4) The exempt amount is the amount found by the formula—

(5) Where an earner has two or more employed earner’s employments, the earnings from which fall to be aggregated in accordance with regulation 14 or 15, the reference to the secondary contributor in paragraph (b) of the definition of QW is a reference to the secondary contributor in respect of any of those employments.

(6) An earner is only entitled to one exempt amount even if childcare vouchers are provided in respect of more than one child.

(7) Condition A is that the voucher is provided to enable an employee to obtain care for a child who—

(a)is a child or stepchild of the employee and is maintained (wholly or partly) at the employee’s expense; or

(b)is resident with the employee and is a person in respect of whom the employee has parental responsibility.

(8) Condition B is that the voucher can only be used to obtain qualifying child care.

(9) Condition C is that the vouchers are provided under a scheme that is open—

(a)to the employer’s [F48eligible] employees generally; or

(b)generally to those at a particular location,

subject to sub-paragraph (10).

(10) Where the scheme under which the vouchers are provided involves—

(a)relevant salary sacrifice arrangements; or

(b)relevant flexible remuneration arrangements,

Condition C is not prevented from being met by reason only that the scheme is not open to relevant low-paid employees.

(11) Condition D is that the employer has, at the required time, made an estimate of the employee’s relevant earnings amount for the tax year in respect of which the voucher is provided.

(12) In sub-paragraph (11) “the required time”, in the case of an employee, means—

(a)if the employee joins the scheme under which the vouchers are provided at a time during the tax year, that time, and

(b)otherwise, the beginning of the tax year.

(13) In sub-paragraph (11) the “relevant earnings amount”, in the case of an employee provided with vouchers by an employer for any qualifying week in a tax year, and subject to sub-paragraph (14), means—

(a)the aggregate of—

(i)the amount of any relevant earnings (see sub-paragraph (15)) for the tax year from employment by the employer; and

(ii)any amounts to be treated under Chapters 2 to 12 of Part 3 of ITEPA 2003 as earnings from such employment; less

(b)the aggregate of any excluded amounts (see sub-paragraph (16)).

(14) But if the employee becomes employed by the employer during the tax year, what would otherwise be the amount of the aggregate mentioned in sub-paragraph (13)(a) is the relevant multiple of that amount; and the relevant multiple is—

(15) In sub-paragraph (13)(a) “relevant earnings” means—

(a)salary, wages or fees, F49...

[F50(b)guaranteed contractual bonuses;

(c)contractual commission;

(d)guaranteed overtime payments;

(e)location or cost of living allowances;

(f)shift allowances;

(g)skills allowances;

(h)retention and recruitment allowances; and

(i)market rate supplements.]

(16) For the purposes of sub-paragraph (13)(b) the following are “excluded amounts”—

(a)contributions under a F51... pension scheme allowed under section 193(2) of Finance Act 2004 (relief under net pay arrangements) to be deducted by the employer from the employee’s employment income for the tax year [F52in accordance with the PAYE Regulations];

[F53(za)contributions under a pension scheme if the employee has authorised the employer to make the deductions from relevant payments (as defined by regulation 4 of the PAYE Regulations) for which relief at source is given under section 192(1) of the Finance Act 2004 (relief at source);]

(b)donations for which a deduction is made under section 713 of ITEPA 2003 (payroll giving) in calculating the employee’s net taxable earnings from employment by the employer for the tax year [F54in accordance with the PAYE Regulations];

(c)expenses within Chapter 3 of Part 3 of ITEPA 2003 (expenses payments) which the employer is authorised to exclude from the employee’s taxable earnings for the tax year in accordance with [F55the] PAYE Regulations;

(d)payments in respect of removal expenses to which section 271 of ITEPA 2003 applies (as defined in section 272) and which are taxable earnings of the employee from employment by the employer for the tax year;

[F56(e)amounts equivalent to the amount of the personal allowance under section 35(1) of the Income Tax Act 2007, and in addition if applicable, the amount of the blind person’s allowance under section 38 of that Act.]]

8.  A non-cash voucher provided to or for the benefit of an employed earner in respect of employed earner’s employment by a person who is not the secondary contributor in respect of the provision of that voucher.U.K.

[F579  A non-cash voucher providing for health screening or medical check-ups to the extent that no liability to income tax arises in the provision of such health screening or medical check-ups [F58by virtue of any provision of or under the Income Tax (Earnings and Pensions) Act 2003 which exempts from liability to income tax the provision by employers to employees of health screening and medical check-ups.]]U.K.

PART VIU.K. PENSIONS AND PENSION CONTRIBUTIONS

[F59Pension payments and pension contributions disregardedU.K.

1.  The payments mentioned in [F60this Part] are disregarded in the calculation of earnings for the purposes of earnings-related contributions.]

[F61 Contributions to, and benefits from, registered pension schemesU.K.

2.  A payment—

(a)by way of employer’s contribution towards a registered pension scheme to which section 308F62... of ITEPA 2003 (exemption of contributions to registered pension scheme) applies;

(b)by way of any benefit pursuant to a registered pension scheme to which—

(i)section 204(1) (authorised pensions and lump sums) of, and Schedule 31 (taxation of benefits under registered pension schemes) to, the Finance Act 2004 applies; or

(ii)section 208 or 209 of that Act (unauthorised payments) applies.]

[F61Migrant member relief and corresponding relief [F63etc.]] U.K.

[F613.—[F64(1)] A payment by way of—

(a)an employer’s contribution to which paragraph 2 of Schedule 33 of the Finance Act 2004 (relief for employers' contributions) applies [F65and any benefit referable to that contribution];

(b)an employer’s contribution to which article 15(2) of the Taxation of Pension Schemes (Transitional Provisions) Order 2006 (employers with pre-commencement entitlement to corresponding relief) applies [F66and any benefit referable to that contribution]; F67...

[F68(ba)an employer’s contribution to a pension scheme established by a government outside the United Kingdom for the benefit of its employees or primarily for their benefit, and any benefit referable to such a contribution (whenever made);]

F69(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F70(d)benefits from a pension scheme which are referable to contributions made before 6^th April 2006, provided that section 386 of ITEPA 2003 did not apply to those contributions by virtue of section 390 of that Act; or

(e)benefits subject to the unauthorised payment charge imposed by section 208 of the Finance Act 2004 as applied to a relevant non-UK scheme by virtue of paragraph 1 of Schedule 34 to that Act.]

[F71(2) Expressions defined in Schedule 34 to the Finance Act 2004 have the same meaning in this paragraph as they have there.]]

Funded unapproved retirement benefit schemes.U.K.

4.  A payment by way of relevant benefits pursuant to a retirement benefits scheme which has not been approved by the Board for the purposes of Chapter I of Part XIV of the Taxes Act and attributable to payments prior to 6th April 1998.

Here “relevant benefits” has the meaning given in section 612 of the Taxes Act.

Payments to pension previously taken into account in calculating earningsU.K.

5.  A payment by way of any benefit pursuant to a retirement benefits scheme which has not been approved by the Board for the purposes of Chapter I of Part XIV of the Taxes Act and attributable to payments on or after 6th April 1998 [F72and before 6th April 2006] which have previously been included in a person’s earnings for the purpose of the assessment of his liability for earnings-related contributions.

Payments in good faith to scheme solely for providing approved benefits.U.K.

F736.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F74Payments to [F75and benefits from] pension schemes] exempt from UK taxation under double taxation agreementsU.K.

7.—(1) A payment to a pension scheme which is afforded relief from taxation by virtue of [F76any of the following provisions, and any benefit referable to that payment]—

(a)Article 25(8) of the Convention set out in the Schedule to the Double Taxation Relief (Taxes on Income) (France) Order 1968F77;

(b)Article 17A of the Convention set out in the Schedule to the Double Taxation Relief (Taxes on Income) (Republic of Ireland) Order 1976F78;

[F79(bb)Article 27(2) of the Convention set out in the Schedule to the Double Taxation Relief (Taxes on Income) (Canada) Order 1980;]

(c)Article 28(3) of the Convention set out in the Schedule to the Double Taxation Relief (Taxes on Income)(Denmark) Order 1980F80.

[F81(d)Article 18 of the Convention set out in the Schedule to the Double Taxation Relief (Taxes on Income) (The United States of America) Order 2002.]

[F82(e)Article 17(3) of the Convention set out in the Schedule to the Double Taxation Relief (Taxes on Income) (South Africa) Order 2002;

(f)Article 17(3) of the Convention set out in the Schedule to the Double Taxation Relief (Taxes on Income) (Chile) Order 2003.]

F83(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F84Contributions to, and benefits from, employer-financed retirement benefits schemesU.K.

8.  A payment by way of—

(a)an employer’s contribution towards an employer-financed retirement benefits scheme; and

(b)benefits, pursuant to an employer-financed retirement benefits scheme, to which paragraph 10 applies.

Here and in paragraph 10 “employer-financed retirement benefits scheme” has the meaning given in section 393A of ITEPA 2003.

Contributions to, and pension payments from, employer-financed pension only schemesU.K.

9.—(1) A payment by way of—

(a)an employer’s contribution towards an employer-financed pension only scheme; and

(b)a pension, pursuant to an employer-financed pension only scheme, which is income charged to tax pursuant to Part 9 of ITEPA 2003 to which paragraph 10 applies.

(2) In this paragraph “employer-financed pension only scheme” means a scheme—

(a)financed by payments made by or on behalf of the secondary contributor, and

(b)providing only a pension (and which is accordingly not an employer-financed retirement benefits scheme because it does not provide relevant benefits).

Here “relevant benefits” has the meaning given in section 393B of ITEPA 2003.

Payments from employer-financed retirement benefits schemes and employer-financed pension only schemesU.K.

10.—(1) This paragraph applies to payments in paragraphs 8(b) and 9(1)(b) which—

(a)if the scheme had been a registered pension scheme—

(i)would have been authorised member payments under any of the provisions of section 164 of the Finance Act 2004 (authorised member payments) listed in sub-paragraph (4); and

(ii)would satisfy any of the conditions in sub-paragraph (5); and

(b)are made after the employment of the employed earner by—

(i)the secondary contributor,

(ii)a subsidiary of the secondary contributor, or

(iii)a person connected with the secondary contributor or a subsidiary of the secondary contributor,

has ceased.

• For the purposes of this sub-paragraph—

• “subsidiary” has the meaning given in section 838 of the Taxes Act 1988; and

• an employer is connected with any of the persons with respect to whom he would be a connected person by virtue of section 839 of that Act.

(2) In the following provisions of this paragraph—

(a)“the Act” means the Finance Act 2004;

(b)a reference to a numbered section or Schedule (without more) is a reference to the section or Schedule bearing that number in the Act; and

(b)any reference to a numbered pension rule is to the pension rule contained in section 165 bearing that number.

(3) In applying any provision of the Act for the purposes of this paragraph, a reference to the scheme administrator is to be read as a reference to—

(a)the responsible person, within the meaning of section 399A of ITEPA 2003, in relation to the employer-financed retirement benefits scheme, or

(b)the person who would be the responsible person if the scheme were an employer-financed retirement benefits scheme.

(4) The provisions referred to in sub-paragraph (1)(a)(i) are—

(a)[F85section 164(a)] [F85section 164(1)(a)] (pensions permitted by the pension rules (see section 165)),

(b)[F86section 164(b)] [F86section 164(1)(b)] (lump sums permitted by the lump sum rule (see section 166)),

(c)[F87section 164(e)] [F87section 164(1)(e)] (payments pursuant to a pension sharing order or provision), and

(d)[F88section 164(f)] [F88section 164(1)(f)] (payments of a description prescribed by regulations made by the Commissioners for Revenue and Customs).

(5) The conditions referred to in sub-paragraph (1)(a)(ii) are that, if the scheme had been a registered pension scheme—

[F89(a) any pension payable under its rules would have satisfied pension rules 1, 3 and 4;]

(b)in relation to any lump sum payable under its rules, section 166(1)(a) (pension commencement lump sum) and paragraphs 1 to 3 of Schedule 29, as modified by sub-paragraph (6) below, would have been satisfied;

(c)in relation to any lump sum payable under its rules, section 166(1)(b) (serious ill-health lump sum) and paragraph 4 of Schedule 29, as modified by sub-paragraph (6) below, would have been satisfied; and

(d)any pension is payable until the member’s death in instalments at least annually.

(6) The amount to be disregarded shall be computed in accordance with Part 1 of Schedule 29 (lump sum rule) as if that Part were modified as follows—

(a)in paragraph 1 (pension commencement lump sum)—

(i)paragraphs (b) and (f) of sub-paragraph (1) were omitted,

(ii)for sub-paragraph (2) there were substituted—

“(2) But if a lump sum falling within sub-paragraph (1) exceeds the permitted lump sum, no part of it shall be disregarded.”;

(iii)sub-paragraph (4) were omitted; and

(iv)for sub-paragraph (5) there were substituted—

“(5) Paragraph 2 defines the permitted lump sum.”;

(b)for paragraph 2 there were substituted—

“2.  The permitted lump sum is the higher of—

(c)paragraph 3 were omitted;

(d)in paragraph 4, paragraphs (b) and (c) of sub-paragraph (1) and [F90sub-paragraph (2)] [F90sub-paragraphs (2) and (3)] were omitted.

(7) No payment by way of benefits shall be disregarded by virtue of this paragraph if they are payable in respect of a period during which an earner is—

(a)engaged as a self-employed earner under a contract for services with, or

(b)re-employed as an employed earner by,

the secondary contributor from employment with whom the benefits were derived.

[F91Armed forces early departure scheme paymentsU.K.

10A.  A payment under a scheme established by the Armed Forces Early Departure Payments Scheme Order 2005 (S.I. 2005/437) [F92or by the Armed Forces Early Departure Payments Scheme Regulations 2014 (S.I. 2014/2328)].]

Superannuation funds to which section 615(3) of the Taxes Act appliesU.K.

11.  A payment by way of employer’s contribution to a superannuation fund to which section 615(3) of the Taxes Act applies, and a payment by way of [F93a pension or] an annuity paid by such a fund F94....]

[F95Independent advice in respect of conversions and transfers of pension scheme benefitsU.K.

12.  A payment or reimbursement to which no liability to income tax arises by virtue of section 308B of ITEPA 2003 (independent advice in respect of conversions and transfers of pension scheme benefits).]

[F96Payments and reimbursements of the cost of pensions adviceU.K.

13.—(1) A payment or reimbursement of costs incurred, by or in respect of an employee or former or prospective employee, in obtaining relevant pensions advice, if Condition A or B is met.

(2) This paragraph does not apply in relation to a person in a tax year so far as the total amount of any payments and reimbursements under sub-paragraph (1) in the person’s case in that year exceeds £500.

(3) If in a tax year there is in relation to an individual more than one person who is an employer or former employer, sub-paragraphs (1) and (2) apply in relation to the individual as employee or former or prospective employee of any one of those persons separately from their application in relation to the individual as employee or former or prospective employee of any other of those persons.

(4) “Relevant pensions advice”, in relation to a person, means information or advice in connection with—

(a)the person’s pension arrangements; or

(b)the use of the person’s pension funds.

(5) Condition A is that the payment or reimbursement is provided under a scheme that is open—

(a)to the employer’s employees generally; or

(b)generally to the employer’s employees at a particular location.

(6) Condition B is that the payment or reimbursement is provided under a scheme that is open generally to the employer’s employees, or generally to those of the employer’s employees at a particular location, who—

(a)have reached the minimum qualifying age; or

(b)meet the ill-health condition.

(7) The “minimum qualifying age”, in relation to an employee, means the employee’s relevant pension age less 5 years.

(8) “Relevant pension age”, in relation to an employee, means—

(a)where paragraph 22 or 23 of Schedule 36 to the Finance Act 2004 applies in relation to the employee and a registered pension scheme of which the employee is a member, the employee’s protected pension age (see paragraphs 22(8) and 23(8) of Schedule 36 to the Finance Act 2004); or

(b)in any other case, the employee’s normal minimum pension age, as defined by section 279(1) of the Finance Act 2004.

(9) The “ill-health condition” is met by an employee if the employer is satisfied, on the basis of evidence provided by a registered medical practitioner, that the employee is (and will continue to be) incapable of carrying on his or her occupation because of physical or mental impairment.]

[F97Compensation payments under Part 1 of the Public Service Pensions and Judicial Offices Act 2022U.K.

14.  A compensation payment made under or by virtue of Part 1 (Public Service Pension Schemes) of the Public Service Pensions and Judicial Offices Act 2022.]

[F98War Widows Recognition payments U.K.

15.  A payment made by the Ministry of Defence to a person under the War Widows Recognition Payment Scheme.]

PART VIIU.K. PAYMENTS IN RESPECT OF TRAINING AND SIMILAR COURSES

Payments in respect of training and similar payment disregardedU.K.

1.  The training payments and vouchers mentioned in this Part are disregarded in the calculation of an employed earner’s earnings.

[F99Paragraphs 5 to 9] [F99paragraphs 5 to 8] do not apply to Northern Ireland.

Work-related trainingU.K.

2.  A payment of, or contribution towards, expenditure incurred on providing work-related training which, by virtue of [F100sections 250 to 254 of ITEPA 2003 (exemption for work-related training)], is not to be taken as [F101general earnings ] of the office or employment in connection with which it is provided.

Education and training funded by employersU.K.

3.  A payment in respect of expenditure which, by virtue of [F102section 255 of ITEPA 2003 (exemption for contributions to individual learning account training)], is not to be taken as [F103general earnings] of the office or employment in connection with which it is provided.

New Deal 50plus: employment grant and training creditU.K.

4.  A payment to a person, as a participant in the scheme arranged under section 2(2) of the Employment and Training Act 1973 and known as New Deal 50plus, of an employment credit or a training grant under that scheme.

Retraining courses for recipients of jobseeker’s allowanceU.K.

5.  A payment to a person as a participant in a scheme of the kind mentioned in section 60(1) of the Welfare Reform and Pensions Act 1999 (special schemes for claimants for jobseeker’s allowances) F104.

Payments to Jobmatch participantsU.K.

6.  A payment made to a participant in a Jobmatch Scheme (including a pilot) arranged under section 2(1) of the Employment and Training Act 1973 F105 in his capacity as such.

Vouchers provided to Jobmatch participantsU.K.

7.  A payment by way of the discharge of any liability by the use of a voucher given to a participant in a Jobmatch Scheme (including a pilot), arranged under section 2(1) of the Employment and Training Act 1973, in his capacity as such.

[F106Employment Retention and Advancement paymentsU.K.

8.  A payment made to a participant in an Employment Retention and Advancement Scheme, arranged under section 2(1) of the Employment and Training Act 1973, in his capacity as such.]

[F107Return to Work CreditU.K.

9.  A payment made to a participant in a Return to Work Credit Scheme, arranged under section 2(1) of the Employment and Training Act 1973 in his capacity as such.]

[F108Working Neighbourhoods PilotU.K.

10.  A payment made to a participant in a Working Neighbourhoods Pilot, arranged under section 2(1) of the Employment and Training Act 1973, in his capacity as such.

In-Work CreditU.K.

11.  A payment made to a participant in an In-Work Credit scheme, arranged under section 2(1) of the Employment and Training Act 1973, in his capacity as such.]

[F109Payments made by employers to earners in full-time attendance at universities &c.U.K.

12.—(1) A payment to an employed earner receiving full-time instruction at a university, technical college or similar educational establishment (within the meaning of section 331 of the Taxes Act) if the conditions in sub-paragraphs (2) to (6) are satisfied, but subject to the exclusion in sub-paragraph (7).

(2) The employed earner must have enrolled at the educational establishment for a course lasting at least one academic year at the time when payment is made.

(3) The secondary contributor must require the employed earner to attend the course for an average of at least twenty weeks in an academic year.

(4) The educational establishment—

(a)must be open to members of the public generally,

(b)must offer more than one course of practical or academic instruction.

(5) The educational establishment must not be run by—

(a)the secondary contributor, or a person who would be treated by section 839 of the Taxes Act as connected with him; or

(b)a trade organisation of which the secondary contributor is a member.

(6) The total amount of earnings payable to the earner in respect of his attendance, including lodging, travelling and subsistence allowances, but excluding any tuition fees, must not exceed [F110£15,480] in respect of an academic year.

(7) This paragraph does not apply to any payment made by the secondary contributor to the employed earner for, or in respect of, work done for the secondary contributor by the earner (whether during vacations or otherwise).

(8) This paragraph has effect in respect of payments made in relation to the academic year beginning on 1st September 2005 and subsequent academic years.

(9) In this paragraph—

“academic year” means the period beginning on 1st September of one calendar year and ending on 31st August of the following calendar year.

“trade organisation” means an organisation of secondary contributors (in their capacity as employers) the members of which carry on a particular profession or trade for the purposes of which the organisation exists.]

[F111Payments exempted from income tax under section 254A of ITEPA 2003U.K.

13.  A care leaver’s apprenticeship bursary payment which is exempted from income tax under section 254A of ITEPA 2003.]

PART VIIIU.K. TRAVELLING, RELOCATION AND OTHER EXPENSES AND ALLOWANCES OF THE EMPLOYMENT

Travelling, relocation and incidental expenses disregardedU.K.

1.  The travelling, relocation and other expenses and allowances mentioned in this Part are disregarded in the calculation of an employed earner’s earnings.

[F1121A.  For the purposes of this paragraph none of the following amounts are to be disregarded in the calculation of an employed earner’s earnings—U.K.

(a)any amount paid or reimbursed pursuant to relevant salary sacrifice arrangements as provided for in section 289A(5);

(b)any amount paid or reimbursed to an employed earner which falls within regulation 22(13); and

(c)any amount paid to an employed earner in respect of anticipated expenses that have yet to be incurred (whether or not such expenses are actually incurred after the payment is made).]

Relocation expensesU.K.

2.—(1) A payment of, or contribution towards, expenses reasonably incurred by a person in relation to a change of residence in connection with the commencement of, or an alteration in the duties of the person’s employment or the place where those duties are normally to be performed is disregarded if the conditions in sub-paragraphs (2) to (6) are met.

(2) The first condition is that—

(a)the payment or contribution—

[F113(i)is not, by virtue of section 271 of ITEPA 2003 (limited exemption of removal benefits and expenses) liable to income tax as general earnings under that Act; or]

(ii)would not have been so regarded, but is in fact disregarded [F114by virtue of another provision of ITEPA 2003; F115...]

F115(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(3) The second condition is that the change of residence must result from—

(a)the employee becoming employed by an employer;

(b)an alteration of the duties of the employee’s employment (where his employer remains the same); or

(c)an alteration of the place where the employee is normally to perform the duties of his employment (where both the employer and the duties which the employee is to perform remains the same).

(4) The third condition is that the change of residence must be made wholly or mainly to allow the employee to have his residence within a reasonable daily travelling distance of—

(a)the place where he performs, or is to perform, the duties of his employment (in a case falling within paragraph (3)(a);

(b)the place where he performs, or is to perform, the duties of his employment (in a case falling within paragraph (3)(b); or

(c)the new place where he performs, or is to perform, the duties of his employment (in a case falling within paragraph (3)(c).

References in this sub-paragraph and sub-paragraph (5) to the place where the employee performs, or is to perform, the duties of his employment are references to the place where he normally performs, or is normally to perform, the duties of the employment.

(5) The fourth condition is that the employee’s former residence must not be within a reasonable daily travelling distance of the place where the employee performs or is to perform the duties of the employment.

F116(6) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F117(7) For the purposes of this paragraph, Chapter 7 of Part 4 of ITEPA 2003 shall be read as if sections 272 (1)(b), 272 (3)(b), 274 and 287 were omitted]

Travelling expenses—generalU.K.

3.  A payment of, or a contribution towards, [F118travel expenses ] which the holder of an office or employment is obliged to incur and [F119pay as the holder of that office or employment [F120but this paragraph is subject to paragraph 1A]].

For the purposes of this paragraph—

[F121(za)“ordinary commuting” means travel between—

(i)the employee’s home and a permanent workplace; or

(ii)a place that is not a workplace and a permanent workplace;

(zb)“private travel” means travel between—

(i)the employee’s home and a place that is not a workplace; or

(ii)two places neither of which is a workplace;]

[F122(a)“travel expenses” means amounts necessarily expended on travelling in the performance of the duties of the office or employment or other expenses of travelling which are attributable to the necessary attendance at any place of the holder of the office or employment in the performance of the duties of the office or employment and are not expenses of—

(i)ordinary commuting;

(ii)travel between any two places that is for practical purposes substantially ordinary commuting;

(iii)travel between any two places that is for practical purposes substantially private travel; or

(iv)private travel.]

F123(b). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c)expenses of travel by the holder of an office or employment between two places at which he performs the duties of different offices or employments under or with companies in the same group are treated as necessarily expended in the performance of the duties which he is to perform at his destination; and

(d)for purpose of sub-paragraph (c) companies are to be taken to be members of the same group if and only if—

(i)one is a 51 per cent subsidiary of the other; or

(ii)both are 51 per cent subsidiaries of a third company

within the meaning of section 838(1)(a) of the Taxes Act (subsidiaries).

[F124Meaning of “workplace” and “permanent workplace”U.K.

3ZA.—(1) For the purposes of paragraph 3—

(a)“workplace”, in relation to an employment, means a place at which the employee’s attendance is necessary in the performance of the duties of the employment,

(b)“permanent workplace”, in relation to an employment, means a place which—

(i)the employee regularly attends in the performance of the duties of the employment, and

(ii)is not a temporary workplace.

This is subject to sub-paragraphs (3) to (7).

(2) In sub-paragraph (1)(b) “temporary workplace”, in relation to an employment, means a place which the employee attends in the performance of the duties of the employment—

(a)for the purpose of performing a task of limited duration, or

(b)for some other temporary purpose.

This is subject to sub-paragraphs (3) and (4).

(3) A place which the employee regularly attends in the performance of the duties of the employment is treated as a permanent workplace and not a temporary workplace if—

(a)it forms the base from which those duties are performed, or

(b)the tasks to be carried out in the performance of those duties are allocated there.

(4) A place is not regarded as a temporary workplace if the employee’s attendance is—

(a)in the course of a period of continuous work at that place—

(i)lasting more than 24 months, or

(ii)comprising all or almost all of the period for which the employee is likely to hold the employment, or

(b)at a time when it is reasonable to assume that it will be in the course of such a period.

(5) For the purposes of sub-paragraph (4), a period is a period of continuous work at a place if over the period the duties of the employment are performed to a significant extent at the place.

(6) An actual or contemplated modification of the place at which duties are performed is to be disregarded for the purpose of sub-paragraphs (4) and (5) if it does not, or would not, have any substantial effect on the employee’s journey, or expenses of travelling, to and from the place where they are performed.

(7) An employee is treated as having a permanent workplace consisting of an area if—

(a)the duties of the employment are defined by reference to an area (whether or not they also require attendance at places outside it),

(b)in the performance of those duties the employee attends different places within the area,

(c)none of the places the employee attends in the performance of those duties is a permanent workplace, and

(d)the area would be a permanent workplace if sub-paragraphs (1)(b), (2), (4), (5) and (6) referred to the area where they refer to a place.]

[F124Travel for necessary attendance: employment intermediariesU.K.

3ZB.—(1) This paragraph applies where an individual (“the worker”)—

(a)personally provides services (which are not excluded services) to another person (“the client”), and

(b)the services are provided not under a contract directly between the client or a person connected with the client and the worker but under arrangements involving an employment intermediary.

This is subject to the following provisions of this paragraph.

(2) Where this paragraph applies, each engagement is for the purposes of paragraphs 3 and 3ZA to be regarded as a separate employment.

(3) This paragraph does not apply if it is shown that the manner in which the worker provides the services is not subject to (or to the right of) supervision, direction or control by any person.

(4) Sub-paragraph (3) does not apply in relation to an engagement if—

(a)Chapter 8 of Part 2 of ITEPA 2003 applies in relation to the engagement,

(b)the conditions in section 51, 52 or 53 of that Act are met in relation to the employment intermediary, and

(c)the employment intermediary is not a managed service company.

(5) This paragraph does not apply in relation to an engagement if—

(a)Chapter 8 of Part 2 of ITEPA 2003 does not apply in relation to the engagement merely because the circumstances in section 49(1)(c) of ITEPA 2003 are not met,

(b)assuming those circumstances were met, the conditions in section 51, 52 or 53 of that Act would be met in relation to the employment intermediary, and

(c)the employment intermediary is not a managed service company.

(6) In determining for the purposes of sub-paragraphs (4) to (5) whether the conditions in section 51, 52 or 53 of ITEPA 2003 are or would be met in relation to the employment intermediary—

[F125(a)in section 51(1) of that Act—

(i)disregard “either” in the opening words, and

(ii)disregard paragraph (b) (and the preceding “or”), and]

(b)read references to the intermediary as references to the employment intermediary.

[F126(6A) Sub-paragraph (6B) applies if—

(a)the client or a relevant person provides the employment intermediary (whether before or after the worker begins to provide the services) with a fraudulent document which is intended to constitute evidence that, by virtue of sub-paragraph (3), this paragraph does not or will not apply in relation to the services,

(b)that paragraph is taken not to apply in relation to the services, and

(c)in consequence, the employment intermediary does not under these Regulations deduct and account for an amount that would have been deducted and accounted for if this paragraph had been taken to apply in relation to the services.

(6B) For the purpose of recovering the amount referred to in sub-paragraph (6A)(c) (“the unpaid contributions”)—

(a)the worker is to be treated as having an employment with the client or relevant person who provided the document, the duties of which consist of the services, and

(b)the client or relevant person is under these Regulations to account for the unpaid contributions as if they arose in respect of earnings from that employment.

(6C) In sub-paragraphs (6A) and (6B) “relevant person” means a person, other than the client, the worker or a person connected with the employment intermediary, who—

(a)is resident, or has a place of business, in the United Kingdom, and

(b)is party to a contract with the employment intermediary or a person connected with the employment intermediary under or in consequence of which—

(i)the services are provided, or

(ii)the employment intermediary, or a person connected with the employment intermediary makes payments in respect of the services.]

[F127(6D) Sub-paragraph (3) does not apply in relation to an engagement if—

(a)regulations 14 to 18 of the Social Security Contributions (Intermediaries) Regulations 2000 apply in relation to the engagement,

(b)one of conditions A to C in regulation 14 of those Regulations is met in relation to the employment intermediary, and

(c)the employment intermediary is not a managed service company.

(6E) This paragraph does not apply in relation to an engagement if—

(a)regulations 14 to 18 of the Social Security Contributions (Intermediaries) Regulations 2000 do not apply in relation to the engagement because the circumstances in regulation 13(1)(d) of those Regulations are not met,

(b)assuming those circumstances were met, one of conditions A to C in regulation 14 of those regulations would be met in relation to the employment intermediary, and

(c)the employment intermediary is not a managed service company.

(6F) In determining for the purposes of sub-paragraph (6D) or (6E) whether one of conditions A to C in regulation 14 is or would be met in relation to the employment intermediary, read references to the intermediary as references to the employment intermediary.]

(7) In determining whether this paragraph applies, no regard is to be had to any arrangements the main purpose, or one of the main purposes, of which is to secure that this paragraph does not to any extent apply.

(8) In this paragraph—

“arrangements” includes any such scheme, transaction or series of transactions, agreement or understanding, whether or not enforceable, and any associated operations;

“employment intermediary” means a person, other than the worker or the client, who carries on a business (whether or not with a view to profit and whether or not in conjunction with any other business) of supplying labour;

“engagement” means any such provision of services as is mentioned in sub-paragraph (1)(a);

“excluded services” means services provided wholly in the client’s home;

“managed service company” means a company which—

[F128Travel by unpaid directors of not-for-profit companiesU.K.

3A.—(1) A payment of, or contribution towards, the expenses of the earner’s employment if or to the extent that payment or contribution is paid wholly and exclusively for the purposes of paying or reimbursing travel expenses in respect of which conditions A to C are met.

(2) Condition A is that —

(a)the earner is obliged to incur the expenses as holder of the employment, and

(b)the expenses are attributable to the earner’s necessary attendance at any place in the performance of the duties of the employment.

(3) Condition B is that the employment is employment as a director of a not-for-profit company.

(4) Condition C is that the employment is one from which the earner receives no earnings other than sums—

(a)paid to the earner in respect of expenses, and

(b)which are so paid by reason of the employment.

(5) In this paragraph—

(a)“director” has the same meaning as in the benefits code (see section 67 of ITEPA 2003), and

(b)“not-for-profit company” means a company that does not carry on activities for the purpose of making profits for distribution to its members or others.

Travel where directorship held as part of a trade or professionU.K.

3B.  A payment of, or contribution towards, the expenses of the earner’s employment to the extent that those expenses are travel expenses which are exempt from income tax in accordance with section 241B of ITEPA 2003 (travel where directorship held as part of a trade or profession).

Travel between linked employmentsU.K.

3C.  A payment of, or contribution towards, the expenses of the earner’s employment to the extent that those expenses are travel expenses deductible for income tax purposes in accordance with section 340A of ITEPA 2003 (travel between linked employments).]

[F129This paragraph is subject to paragraph 1A.]

[F130Travel at start or finish of overseas employmentU.K.

4.  A payment of, or a contribution towards, the expenses of the earner’s employment to the extent that those expenses—

(a)are deductible for income tax purposes in accordance with section 341 of ITEPA 2003 (travel at start or finish of overseas employment); or

(b)would be so deductible if—

(i)Conditions B and C were omitted from that section; and

(ii)the earnings of the employment were subject to income tax as employment income under that Act.

[F131This paragraph is subject to paragraph 1A.]

Travel between employments where duties performed abroadU.K.

4A.  A payment of, or a contribution towards, the expenses of the earner’s employment to the extent that those expenses—

(a)are deductible for income tax purposes in accordance with section 342 of ITEPA 2003 (travel between employments where duties performed abroad), or

(b)would be so deductible if—

(i)Conditions E and F were omitted from that section; and

(ii)the earnings of the employment were subject to income tax as employment income under that Act.

[F132This paragraph is subject to paragraph 1A.]

Travel costs and expenses where duties performed abroad: earner’s travelU.K.

4B.—(1) So much of an employed earner’s earnings as equals the amount in sub-paragraph (2).

(2) The amount in this sub-paragraph is—

(a)the included amount within the meaning of section 370 of ITEPA 2003 (travel costs and expenses where duties performed abroad: employee’s travel); or

(b)the amount which would be the included amount within the meaning of that section if the earner were resident and ordinarily resident in the United Kingdom.

[F133This paragraph is subject to paragraph 1A.]

Travel costs and expenses where duties performed abroad: visiting spouse’s[F134, civil partner's] or child’s travelU.K.

4C.—(1) So much of an employed earner’s earnings as equals the amount in sub-paragraph (2).

(2) The amount in this sub-paragraph is—

(a)the included amount within the meaning of section 371 of ITEPA 2003 (travel costs and expenses where duties performed abroad: visiting spouse’s[F135, civil partner's] or child’s travel); or

(b)the amount which would be the included amount within the meaning of that section if the earner were resident and ordinarily resident in the United Kingdom.

[F136This paragraph is subject to paragraph 1A.]

Foreign accommodation and subsistence costs and expenses (overseas employments)U.K.

4D.  So much of an employed earner’s earnings as equals the amount of the deduction—

(a)permitted for income tax purposes under section 376 of ITEPA 2003 (foreign accommodation and subsistence costs and expenses (overseas employments)); or

(b)which would be so permitted if the earnings of the employment were subject to tax as employment income under ITEPA 2003.

[F137This paragraph is subject to paragraph 1A.]

[F138Travel costs and expenses of non-domiciled employee or the employee’s spouse, civil partner or child where duties performed in the United Kingdom]U.K.

5.  So much of an employed earner’s earnings as equals the aggregate amount of the deductions—

(a)permitted for income tax purposes under sections 373 and 374 of ITEPA 2003 (travel costs and expenses of a non-domiciled employee or the employee’s spouse[F139, civil partner] or child where duties are performed in the United Kingdom ); or

(b)which would be so permitted if the earnings of the employment were subject to tax as employment income under ITEPA 2003.]

[F140This paragraph is subject to paragraph 1A.]

Travelling expenses of workers on offshore gas and oil rigsU.K.

6.  A payment of, or a contribution towards, expenses where that payment or contribution is disregarded for the purposes of calculating the emoluments [F141general earnings under section 305 of ITEPA 2003 (offshore oil and gas workers: mainland transfers).]

[F142Payments connected with cars and vans and exempt heavy goods vehicles provided for private use]U.K.

7.—[F143(1)] A payment—

(a)by way of the discharge of any liability which by virtue of [F144section 239(1) of ITEPA 2003 (payments and benefits connected with taxable cars and vans and exempt heavy goods vehicles)]; or

(b)of expenses, which by virtue of [F145section 239(2)] of that Act;

is not treated as [F146general earnings] of the employment chargeable to income taxF147....

[F148(2) Sub-paragraph (1) does not apply so far as the payment is made pursuant to optional remuneration arrangements.]

[F149Qualifying amounts of relevant motoring expenditureU.K.

7A.—[F143(1)] To the extent that it would otherwise be earnings, the qualifying amount calculated in accordance with regulation 22A(4).

[F150(2) Sub-paragraph (1) does not apply so far as the payment of relevant motoring expenditure within the meaning of regulation 22A(3) is made pursuant to optional remuneration arrangements.]

Qualifying amounts of mileage allowance payment in respect of cyclesU.K.

7B.—(1) To the extent that it would otherwise be earnings, the qualifying amount of a mileage allowance payment in respect of a cycle.

(2) The qualifying amount is that which would be produced by the formula in regulation 22A(4) if the value for R were the rate for the time being approved under [F151section 230(2) of ITEPA 2003] in respect of a cycle.

(3) In this paragraph—

• “cycle” has the meaning given in section 192(1) of the Road Traffic Act 1988; and

• “mileage allowance payment” has the meaning given in [F152section 229(2) of ITEPA 2003].

Qualifying amounts of passenger paymentU.K.

7C.—(1) To the extent that it would otherwise be earnings, the qualifying amount of a passenger payment.

(2) The qualifying amount is that which would be produced by the formula in regulation 22A(4) if—

(a)references to business travel were to business travel for which the employee [F153receives passenger payments within the meaning of section 233(3) of ITEPA 2003; and ]

(b)the value for R were the rate for the time being approved for a passenger payment under [F154section 234 of ITEPA 2003].

(3) In this paragraph—

• “passenger payment” has the meaning given in [F155section 233(3) of ITEPA 2003]; and

• F156...

[F157Car fuelU.K.

7D.—(1) A payment by way of the provision of car fuel which is chargeable to income tax under section 149 of ITEPA 2003.]]

[F158Van fuelU.K.

7E.  A payment by way of the provision of van fuel which is chargeable to income tax under section 160 of ITEPA 2003.]

Car parking facilitiesU.K.

8.  A payment of, or a contribution towards, the provision of car parking facilities at or near the earner’s place of employment which, by virtue of [F159section 237 of ITEPA 2003], is not regarded as [F160general earnings] of the earner’s employment.

[F161Amounts exempted from income tax under section 289A of ITEPA 2003U.K.

8A.  Any amount which is exempted from income tax under section 289A of ITEPA 2003.]

[F162Payments exempted from income tax under section 299B of ITEPA 2003U.K.

8B.  A payment to a person who holds a voluntary office in respect of expenses which is exempted from income tax under section 299B of ITEPA 2003.]

Specific and distinct payments of, or towards, expenses actually incurredU.K.

9.— [F163(1)]  For the avoidance of doubt, [F164there] shall be disregarded any specific and distinct payment of, or contribution towards, expenses which an employed earner actually incurs in carrying out his employment.

[F165This is subject to the following [F166qualifications].]

[F167(2) Sub-paragraph (1) does not authorise the disregard of any amount by way of relevant motoring expenditure, within the meaning of paragraph (3) of regulation 22A—

(a)in excess of that permitted by the formula in paragraph (4) of that regulation; or

(b)so far as it is paid pursuant to optional remuneration arrangements.]

[F168(3) Sub-paragraph (1) does not authorise the disregard of any amount which—

(a)falls within paragraphs (12) or (13) of regulation 22; or

(b)is paid to an employed earner in respect of anticipated expenses that have yet to be incurred (whether or not such expenses are actually incurred after the payment is made).]

[F169council tax or water or sewerage charges] on accommodation provided for employee’s useU.K.

10.  A payment of, or a contribution towards meeting a person’s liability for [F170council tax or water or sewerage charges] in respect of accommodation occupied by him and provided for him by reason of his employment if by virtue of [F171sections 99 or 100 of ITEPA 2003 (accommodation provided for performance of duties or as a result of a security threat)], [F172he is not liable to income tax] F173... in respect of the provision of that accommodation.

This paragraph does not extend to Northern Ireland.

[F174rates or water or sewerage charges ] on accommodation provided for employee’s useU.K.

11.  A payment of, or a contribution towards meeting, a person’s liability for [F175rates or water or sewerage charges ] in respect of accommodation occupied by him and provided for him by reason of his employment if by virtue of [F176sections 99 or 100 of ITEPA 2003 (accommodation provided for performance of duties or as a result of a security threat)], he is not liable to income taxF177... in respect of the provision of that accommodation.

This paragraph extends only to Northern Ireland.

Foreign service allowanceU.K.

12.  A payment by way of an allowance which is not regarded as income for any income tax purpose by virtue of [F178section 299 of ITEPA 2003 (Crown employees' foreign service allowance)].

[F179HM Forces’ Operational AllowanceU.K.

12A.—(1) A payment of the Operational Allowance to members of the armed forces of the Crown.

(2) The Operational Allowance is an allowance designated as such under a Royal Warrant made under section 333 of the Armed Forces Act 2006.]

[F180HM Forces’ Council Tax ReliefU.K.

12B.—(1) A payment of Council Tax Relief to members of the armed forces of the Crown.

(2) Council Tax Relief is a payment designated as such under a Royal Warrant made under section 333 of the Armed Forces Act 2006.]

[F181HM Forces’ Continuity of Education AllowanceU.K.

12C.—(1) A payment of the Continuity of Education Allowance to or in respect of members of the armed forces of the Crown.

(2) The Continuity of Education Allowance is an allowance designated as such under a Royal Warrant made under section 333 of the Armed Forces Act 2006.]

[F182HM Forces’ Accommodation AllowanceU.K.

12D.  A payment to which no liability to income tax arises by virtue of section 297D of ITEPA 2003 (armed forces: accommodation allowances).]

Commonwealth War Graves Commission and British Council: extra cost of living allowanceU.K.

13.  A payment by way of an allowance to a person in the service of the Commonwealth War Graves Commission or the British Council paid with a view to compensating him for the extra cost of living outside the United Kingdom in order to perform the duties of his employment.

Overseas medical treatmentU.K.

14.  A payment of, or a contribution towards, expenses incurred in—

(a)providing an employee with medical treatment outside the United Kingdom (including providing for him to be an in-patient) in a case where the need for the treatment arises while the employee is outside the United Kingdom for the purposes of performing the duties of his employment; or

(b)providing insurance for the employee against the cost of such treatment in a case falling within sub-paragraph (a).

Here “medical treatment” includes all forms of treatment for, and all procedures for diagnosing, any physical or mental ailment, infirmity or defect.

[F183Recommended medical treatmentU.K.

14A.  A payment or reimbursement to which no liability to income tax arises by virtue of section 320C of ITEPA 2003 (recommended medical treatment).]

[F184Experts Seconded to European CommissionU.K.

15.  A payment in respect of daily subsistence allowances paid by the European Commission to persons whose services are made available to the Commission by their employers under the detached national experts scheme which is exempt from income tax by virtue of section 304 of ITEPA 2003 (experts seconded to European Commission).]

[F185Experts seconded to a body of the European UnionU.K.

15A.  A payment in respect of subsistence allowances paid—

(a)by a body of the European Union that is located in the United Kingdom and listed in the table below;

(b)to persons who, because of their expertise in matters relating to the subject matter of the functions of the body, are seconded to the body by their employers.

[F186Expenses of MPs and other representativesU.K.

16.  A payment to which no liability to income tax arises by virtue of any of the following provisions of ITEPA 2003—

(a)section 292 (accommodation expenses of MPs);

(b)section 293 (overnight expenses of other elected representatives);

(c)section 293A (UK travel and subsistence expenses of MPs);

[F187(ca)section 293B (UK travel expenses of other elected representatives);]

(d)section 294 (European travel expenses of MPs and other representatives).]

[F188Travel expenses of members of local authorities etcU.K.

17.  A payment to which no liability to income tax arises by virtue of section 295A of ITEPA 2003 (travel expenses of members of local authorities etc).]

PART IXU.K. [F189Incentives by way of securities.]

[F190Certain payments by way of securities, restricted securities and restricted interests in securities, and gains arising from them, disregarded]U.K.

1.—[F190(1) Payments by way of securities, restricted securities and restricted interests in securities, and gains arising from them, are disregarded in the calculation of an employed earner’s earnings to the extent mentioned in this Part.]

(2) For the purposes of paragraphs 13, 15 and 16—

(a)“body corporate” includes—

(i)a body corporate constituted under the law of a country or territory outside the United Kingdom, and

(ii)an unincorporated association wherever constituted;

(b)“total discount” means the difference between the total value of the exercise price of the shares that are subject to the right in question and the total market value of that right;

(c)“total market value” means the price which the shares that are subject to the right in question might reasonably be able to fetch in the open market; and

(d)the total market value of the subsequent right is similar to the total market value of the first right if it is not substantially greater than the first right.

Shares in secondary contributor or associated bodyU.K.

F1912.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F192 Rights to acquire securitiesU.K.

3.  A payment by way of a right to acquire securities.]

“Short” share options granted on or after 6th April 1999U.K.

F1933A.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Enterprise management incentivesU.K.

F1944.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F195Priority share allocations]U.K.

[F1955.  A payment by way of an allocation of shares in priority to members of the public in respect of which no liability to income tax arises by virtue of section 542 of ITEPA 2003.]

Partnership share agreementsU.K.

6.  A payment that is deducted from the earnings of the employment under a partnership share agreement.

Here “partnership share agreement” has the meaning given in [F196paragraph 44 of Schedule 2 to ITEPA 2003.]

[F197Shares under share incentive plansU.K.

7.  A payment by way of an award of shares under a share incentive plan within the meaning of Schedule 2 to ITEPA 2003.

Securities and interests in securities which are not readily convertible assetsU.K.

7A.  A payment by way of the acquisition of securities, interests in securities or securities options in connection with employed earner’s employment if, or to the extent that, what is acquired is not a readily convertible asset.

Here “acquisition” includes acquisition pursuant to an employment-related securities option within the meaning of section 471(5) of ITEPA 2003 as substituted by the Finance Act 2003.]

Shares under approved profit sharing schemesU.K.

F1988.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F199 Restricted securities and restricted interests in securitiesU.K.

9.—(1) A payment by way of the acquisition of restricted securities, or a restricted interest in securities, where those securities are, or that interest is, employment-related, if no charge to income tax arises under section 425 of ITEPA 2003 other than by virtue of subsection (2) of that section.

• This is subject to the following qualification.

(2) This paragraph does not apply if an election has been made as mentioned in subsection (3) of section 425 of ITEPA 2003.

(3) References in this paragraph to section 425 of ITEPA 2003 are to that section as substituted by paragraph 3(1) of Schedule 22 to the Finance Act 2003.]

Conditional interest in shares: gains from exercise etc. of share optionsU.K.

F20010.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Convertible sharesU.K.

F20011.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Convertible shares: gains from the exercise etc. of share optionsU.K.

F20012.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Share option gains by directors and employeesU.K.

F20013.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Shares acquired under options granted before 9th April 1998U.K.

F20014.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Assignment or release of optionU.K.

F20015.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F201 Exercise of replacement share options where original option acquired before 6th April 1999U.K.

16.—(1) A gain realised by the exercise of a replacement right to acquire shares in a body corporate where the original right was obtained before 6th April 1999 provided that—

(a)sub-paragraph (4) is satisfied, and

(b)paragraph 17 does not apply,

• The disregard conferred by this paragraph is subject to the following limitation.

(2) Only the value of the shares acquired by the exercise of the replacement right shall be disregarded.

(3) In this paragraph and paragraph 17—

“the original right” means the right, acquired before 6th April 1999, to acquire shares in a body corporate; and

“replacement right” means a right to acquire shares, obtained, whether as the result of one transaction or a series of transactions, and whether directly or indirectly, in consequence of—

(4) This sub-paragraph is satisfied in respect of a transaction through which the replacement right was obtained if A is not substantially greater than R.

• Here—

  • A is the market value of the shares which may be obtained by the exercise of the right acquired on that occasion, less any consideration which would have to be given on that occasion by or on behalf of the earner if that right were to be exercised immediately after its acquisition (disregarding any restriction on its exercise); and

  • R is the market value of the shares subject to the right assigned or released on that occasion, immediately before that occasion, less any consideration which would have been required to be given by or on behalf of the earner for the exercise of that right, disregarding any restriction on its exercise, subject to the following qualification.

  • If a transaction involves only a partial replacement of an earlier right, the amount of the earlier consideration to be deducted in computing R shall be proportionately reduced.]

[F202Payments resulting from exercise, assignment or release of options which are not disregarded by virtue of paragraph 16U.K.

17.—(1) This paragraph applies to a payment—

(a)made on or after 10th April 2003, and

(b)which would otherwise fall to be disregarded by virtue of paragraph 16 [F203or 16A] of this Part,

where the market value of the shares has been increased by more than 10% by things done, on or after 6th April 1999, otherwise than for genuine commercial purposes.

(2) For the purposes of sub-paragraph (1) “the shares” includes—

(a)the shares subject to the right currently being exercised; and

(b)where the right to acquire shares held on 6th April 1999 has been replaced by a [F204replacement right], includes the shares subject to [F205a replacement right.]

(3) The following are among the things that are, for the purposes of this paragraph, done otherwise than for genuine commercial purposes—

(a)anything done as part of a scheme or arrangement the main purpose, or one of the main purposes, of which is the avoidance of tax or of contributions under the Act; and

(b)any transaction between companies which, at the time of the transaction, are members of the same group on terms which are not such as might be expected to be agreed between persons acting at arm’s length.

(4) But sub-paragraph (3)(b) does not apply to a payment for group relief within the meaning given in section 402(6) of the Taxes Act.

(5) In sub-paragraph (3)(b) “group” means a body corporate and its 51% subsidiaries (within the meaning of section 838 of the Taxes Act), and other expressions used in this paragraph which are defined in, or for the purposes of, paragraph 16 have the same meaning here as they have in that paragraph.]

[F206Payments made to internationally mobile employeesU.K.

18.—(1) So much of any payment as equals the amount in sub-paragraph (3).

(2) For the purposes of calculating the amount in sub-paragraph (3) treat amounts which count as employment income under Chapters 2 to 5 of Part 7 of ITEPA 2003 as having been paid in equal instalments on each day of the “relevant period” as determined in accordance with section 41G of ITEPA 2003.

(3) The amount in this sub-paragraph is calculated by adding together every instalment which would satisfy the condition in sub-paragraph (4), (5) or (6) on the day on which the instalment is treated as having been paid.

(4) The condition in this sub-paragraph is that the instalment does not give rise to a liability to pay earnings-related contributions because the employed earner does not fulfil the prescribed conditions as to residence or presence in Great Britain or Northern Ireland (as the case requires) set out in paragraph (1) of regulation 145 or because the proviso in paragraph (2) of that regulation applies.

(5) The condition in this sub-paragraph is that the instalment does not give rise to a liability to pay earnings-related contributions because the employed earner is determined in accordance with Title II of Regulation No (EC) 883/2004 and Title II of Regulation No (EC) 987/2009 to be subject only to the legislation of another EEA State or Switzerland.

(6) The condition in this sub-paragraph is that the instalment does not give rise to a liability to pay earnings-related contributions because the employed earner is determined to be subject only to the legislation of a country outside the United Kingdom pursuant to an Order in Council having effect under section 179 of the Administration Act.]

PART XU.K. MISCELLANEOUS AND SUPPLEMENTAL

Other miscellaneous payments to be disregardedU.K.

1.—(1) The payments listed in [F207this Part] are disregarded in the calculation of earnings.

(2) Paragraph 4 contains additional rules about the way in which the components of a payment by way of expenses incidental to a qualifying absence from home are to be treated for the purpose of earnings-related contributions if the permitted maximum is exceeded.

Payments on account of sums already included in the computation of earningsU.K.

2.  A payment on account of a person’s earnings in respect of his employment as an employed earner which comprises, or represents and does not exceed sums which have previously been included in his earnings for the purpose of his assessment of earnings-related contributions.

[F208Payments connected to amounts within regulation 22BU.K.

2A.—(1) A payment (“A”) the subject of which represents, or arises or derives (whether wholly or partly or directly or indirectly) from, an amount (“B”) treated as remuneration under regulation 22B which has previously been included in an employed earner’s earnings for the purposes of assessing earnings-related contributions.

(2) Paragraph (1) does not apply to the extent that A exceeds B.

(3) For the purposes of determining whether paragraph (1) applies, A is to be treated as including the value of any payment made before A which represents, or arises or derives (whether wholly or partly or directly or indirectly) from, B.]

Payments discharging liability for secondary Class 1 contributions following election under paragraph 3B of Schedule 1 to the Contributions and Benefits ActU.K.

3.  A payment by way of the discharge of any liability for secondary Class 1 contributions which has been transferred from the secondary contributor to the employed earner by election made jointly by them for the purposes of paragraph 3B(1) of Schedule 1 to the Contributions and Benefits Act (elections about contribution liability in respect of [F209relevant employment income]) F210.

Payments by way of incidental [F211overnight ] expensesU.K.

4.—[F212(1) A payment by way of incidental overnight expenses, in whatever form, which by virtue of section 240 of ITEPA 2003 are not general earnings liable to income tax under that Act.

(2) If a payment is made by way of incidental overnight expenses in connection with a qualifying period, but the amount of that payment (calculated in accordance with section 241 of ITEPA 2003) exceeds the permitted amount, sub-paragraphs (3) to (6) apply.]

(3) So much of the payment as is made by way of cash shall be included in the calculation of earnings.

(4) The amount of cash for which a cash voucher can be exchanged shall be included in the calculation of earnings.

(5) The cost of provision of any non-cash voucher shall be included in the calculation of earnings and anything for which the voucher can be exchanged shall be disregarded in that calculation.

(6) Any payment by way of a benefit in kind shall be disregarded in the calculation of earnings.

[F213(7) In this paragraph—

• “the cost of provision” in relation to a non-cash voucher is the cost incurred by the person at whose expense the voucher is provided;

• “the permitted amount” has the meaning given in section 241(3) of ITEPA 2003; and

• “qualifying period” has the meaning given in section 240(1)(b) and (4) of ITEPA 2003.]

Gratuities and offeringsU.K.

5.—(1) A payment of, or in respect of, a gratuity or offering [F214which—

(a)satisfies the condition in either sub-paragraph (2) or (3); and

(b)is not within sub-paragraph (4) or (5).]

(2) [F215The condition in this sub-paragraph] is that the payment—

(a)is not made, directly or indirectly, by the secondary contributor; and

(b)does not comprise or represent sums previously paid to the secondary contributor.

(3) [F216The condition in this sub-paragraph] is that the secondary contributor does not allocate the payment, directly or indirectly, to the earner.

[F217(4) A payment made to the earner by a person who is connected with the secondary contributor is within this sub-paragraph unless—

(a)it is—

(i)made in recognition for personal services rendered to the connected person by the earner or by another earner employed by the same secondary contributor; and

(ii)similar in amount to that which might reasonably be expected to be paid by a person who is not so connected; or

(b)the person making the payment does so in his capacity as a tronc-master.

(5) A payment made to the earner is within this sub-paragraph if it is made by a trustee holding property for any persons who include, or any class of persons which includes, the earner.

In this sub-paragraph “trustee” does not include a tronc-master.

(6) A person is connected with the secondary contributor for the purposes of this paragraph if his relationship with the secondary contributor, or where the employer and secondary contributor are different, with either of them, is as described in subsection (2), (3), (4), (5), (6) or (7) of section 839 of the Taxes Act (connected persons).]

Redundancy paymentsU.K.

6.  For the avoidance of doubt, in calculating the earnings paid to or for the benefit of an earner in respect of an employed earner’s employment, any payment by way of a redundancy payment shall be disregarded.

Sickness payments attributable to contributions made by employed earnerU.K.

7.  If the funds for making a sickness payment under arrangements of the kind mentioned in section 4(1)(b) of the Contributions and Benefits Act are attributable in part to contributions to those funds made by the employed earner, for the purposes of section 4(1) of that Act the part of that payment which is attributable to those contributions shall be disregarded.

[F218Expenses and other payments not charged to income tax under miscellaneous exemptionsU.K.

8.   A payment which is not charged to tax under any of the following provisions of ITEPA 2003—

(a)section 245 (travelling and subsistence during public transport strikes);

(b)section 246 (transport between work and home for disabled employees: general);

(c)section 248 (transport home: late night working and failure of car-sharing arrangements);

(d)section 290A (accommodation outgoings of ministers of religion);

(e)section 290B (allowances paid to ministers of religion in respect of accommodation outgoings);

(f)section 321 (suggestion awards).]

VAT on the supply of goods and services by employed earnerU.K.

9.  If—

(a)goods or services are supplied by an earner in employed earner’s employment;

(b)earnings paid to or for the benefit of the earner in respect of that employment include the remuneration for the supply of those goods or services; and

(c)value added tax is chargeable on that supply;

an amount equal to the value added tax chargeable on that supply shall be excluded from the calculation of those earnings.

[F219Employee’s liabilities and indemnity insurance]U.K.

10.  [F219 A payment which by virtue of section 346 of ITEPA 2003 (deduction for employee liabilities) is deductible from the general earnings of the employment chargeable to tax under that Act.]

[F220This paragraph is subject to paragraph 1A of Part 8 of this Schedule.]

Fees and subscriptions to professional bodies, learned societies etcU.K.

11.  A payment of, or a contribution towards any fee, contribution or annual subscription which, under section 201(1) of the Taxes Act (fees and subscriptions to professional bodies, learned societies etc) is deductible from the emoluments of any office or employment. [F221This paragraph is subject to paragraph 1A of Part 8 of this Schedule.]

Holiday payU.K.

12.  [F222A payment in respect of a period of holiday entitlement where—

(a)the sum paid is derived directly or indirectly from a fund—

(i)to which more than one secondary contributor contributes, and

(ii)the management and control of which are not vested in those secondary contributors; or

(b)the person making the payment is entitled to be reimbursed from such a fund.]

Payments to ministers of religionU.K.

13.  A payment of a fee in respect of employment as a minister of religion which does not form part of the stipend or salary paid in respect of that employment.

[F223 Payments to miners and former miners, etc. in lieu of coalU.K.

14.—(1) A payment in lieu of the provision of coal or smokeless fuel, if the employee is—

(a)a colliery worker;

(b)a former colliery worker;

and the condition in sub-paragraph (2) is met.

(2) The condition is that the amount of coal or fuel in respect of which the payment is made does not substantially exceed the amount reasonably required for personal use.

(3) That condition is assumed to be met unless the contrary is shown.

(4) In this pans a coragraph, “colliery worker” meaal miner or any other person employed at or about a colliery otherwise than in clerical, administrative or technical work; and “former colliery worker” shall be construed accordingly.

(5) This paragraph does not apply to Northern Ireland.]

Here “miner” means any person employed in or about a colliery, whether on the surface or below ground, except a person employed—

(a)in a clerical, technical or administrative capacity; or

(b)at a coke oven, brick works or other activity not ancillary to coal mining.

(2) This paragraph does not apply to Northern Ireland.

[F224Rewards for assistance with lost or stolen cardsU.K.

15.—(1) A payment made by an issuer of charge cards, cheque guarantee cards, credit cards or debit cards, as a reward to an individual who assists in identifying or recovering lost or stolen cards in the course of his or her employment as an employed earner (other than employment by the issuer), together with any income tax paid by the issuer for the purpose of discharging any liability of the individual to income tax on the payment.

(2) In this paragraph—

“charge card” means a credit card, the terms of which include the obligations to settle the account in full at the end of a specified period;

“cheque guarantee card” means a card issued by a bank or building society for the purpose of guaranteeing a payment or supporting the encashment of a cheque up to a specified value;

“credit card” means a card which—

“debit card” means a card linked to a bank or building society current account, used to pay for goods or services by debiting the holder’s account.]

[F225Student loansU.K.

16.—(1) A payment made in accordance with Regulations made under section 186 of the Education Act 2002 in respect of the repayment, reduction or extinguishing of the amounts payable in respect of a loan.

(2) A payment for the purpose of discharging any liability of the earner to income tax for any tax year where the income tax in question is tax chargeable in respect of—

(a)the payment referred to in paragraph (1), or

(b)the payment made for the purpose of discharging the income tax liability itself.]

[F226Payment of PAYE tax in respect of notional paymentU.K.

17.  A payment by way of income tax for which the employer is required to account to the Board under section 710(1) of ITEPA 2003 (notional payments: accounting for tax).]

[F227Payments made from the In-Work Emergency Discretion FundU.K.

18.  Any In-Work Emergency Discretion Fund payment made to a person pursuant to arrangements made by the Secretary of State under section 2 of the Employment and Training Act 1973.

This paragraph does not apply in Northern Ireland.

Payments made from the In-Work Emergency FundU.K.

19.  Any In-Work Emergency Fund payment made to a person pursuant to arrangements made by the Department of Economic Development under section 1 of the Employment and Training Act (Northern Ireland) 1950.

This paragraph applies only in Northern Ireland.]

[F228Up-Front Childcare Fund paymentsU.K.

20.  Any Up-Front Childcare Fund payment made pursuant to arrangements made by the Secretary of State under section 2 of the Employment and Training Act 1973.

This paragraph does not apply to Northern Ireland.]

[F229Better off in Work Credit paymentsU.K.

21.  Any Better off in Work Credit payment made pursuant to arrangements made by the Secretary of State under section 2 of the Employment and Training Act 1973.

This paragraph does not apply to Northern Ireland.]

[F230Fees relating to the Protection of Vulnerable Groups (Scotland) SchemeU.K.

22.  A payment of a fee in respect of an application to join the scheme administered under section 44 of the Protection of Vulnerable Groups (Scotland) Act 2007 (scheme to collate and disclose information about individuals working with vulnerable persons).]

[F231Fees relating to the Disclosure and Barring ServiceU.K.

23.—(1) A fee paid by virtue of section 116A(4)(b) or (5)(b) of the Police Act 1997 (“the Police Act”) (fee for up-dating certificates).

(2) A fee paid under—

(a)section 113A(1)(b) of the Police Act (fee for criminal record certificates);

(b)section 113B(1)(b) of the Police Act (fee for enhanced criminal record certificates);

(c)section 114(1)(b) of the Police Act (fee for criminal record certificates: Crown employment); or