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); or

(b)in the circumstances specified in paragraph 4 of Part X (payments by way of [F16incidental overnight expenses]).]

2.  A non-cash voucher which is not treated as [F17general earnings] from employment for the purposes of [F18section 86 of ITEPA 2003 (transport vouchers under pre-26th March arrangements).]U.K.

[F19This paragraph only applies in the case of an employee who is in lower paid employment, within the meaning of section 217 of ITEPA 2003]

[F203.  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.

F20. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

F204.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .U.K.

[F215.  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).

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);

[F22(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);

[F23(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);

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

[F24Meal vouchersU.K.

6A.  15 pence per working day up to a maximum of £1.05 per week of the value of one or more non-cash vouchers which can only be exchanged for meals.]

[F25Qualifying childcare vouchersU.K.

7.—(1) A qualifying childcare voucher, subject to the qualifications in sub-paragraphs (2) and (5).

(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) For the purposes of this paragraph—

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

(b)“qualifying childcare voucher” and “qualifying week” have the meanings given in section 270A of the Income Tax (Earnings and Pensions) Act 2003;

(c)the administration costs for a voucher means the difference between the cost of provision of a voucher and its face value; and

(d)the face value of a voucher 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.]

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.

[F279  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 by virtue of the Income Tax (Exemption of Minor Benefits) Regulations 2002 regulation 7 (exemption in respect of the provision of health screening and medical check-ups).]U.K.

PART VIU.K. PENSIONS AND PENSION CONTRIBUTIONS

[F28Pension payments and pension contributions disregardedU.K.

1.  The payments mentioned in paragraphs 2 to 11 are disregarded in the calculation of earnings for the purposes of earnings-related contributions.]

[F29 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 308(1) 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.]

[F29Migrant member relief and corresponding relief [F30etc.]] U.K.

[F293.—[F31(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 [F32and 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 [F33and any benefit referable to that contribution]; F34...

[F35(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);]

F36(c). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F37(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.]

[F38(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 [F39and 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.

F406.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F41Payments to 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—

(a)Article 25(8) of the Convention set out in the Schedule to the Double Taxation Relief (Taxes on Income) (France) Order 1968F42;

(b)Article 17A of the Convention set out in the Schedule to the Double Taxation Relief (Taxes on Income) (Republic of Ireland) Order 1976F43;

[F44(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 1980F45.

[F46(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.]

[F47(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.]

F48(2) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F49Contributions 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)section 164(a) (pensions permitted by the pension rules (see section 165)),

(b)section 164(b) (lump sums permitted by the lump sum rule (see section 166)),

(c)section 164(e) (payments pursuant to a pension sharing order or provision), and

(d)section 164(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—

(a)any pension payable under its rules would have satisfied—

(i)pension rules 1 and 3,

(ii)pension rule 4 or pension rule 6, and

(iii)paragraph 1(1)(e) of Schedule 29;

(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 sub-paragraph (2) 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.

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 [F50a pension or] an annuity paid by such a fund F51....]

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.

[F52Paragraphs 5 to 9] [F52paragraphs 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 [F53sections 250 to 254 of ITEPA 2003 (exemption for work-related training)], is not to be taken as [F54general 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 [F55section 255 of ITEPA 2003 (exemption for contributions to individual learning account training)], is not to be taken as [F56general 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) F57.

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 F58 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.

[F59Employment 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.]

[F60Return 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.]

[F61Working 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.]

[F62Payments 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 [F63£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.]

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.

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—

[F64(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 [F65by virtue of another provision of ITEPA 2003; or ]

(b)the person concerned commenced performance of the duties, or altered duties, of his employment at the place, or the altered place, of their performance before 6th April 1998.

(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.

(6) In a case to which sub-paragraph (2)(b) applies, expenditure incurred in pursuance of a contract or agreement entered into before 6th April 1998 does not, in the case of a contract or agreement varied at any time on or after that date, include so much of the expenditure incurred under that contract or agreement which would not have been incurred, or exceeds the amount of expenditure that would have been reasonably incurred, if that contract or agreement had not been so varied.

[F66(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, [F67travel expenses ] which the holder of an office or employment is obliged to incur and [F68pay as the holder of that office or employment].

For the purposes of this paragraph—

(a)“[F69travel expenses ]” means—

(i)amounts necessarily expended on travelling in the performance of the duties of the office or employment; or

(ii)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 ordinary commuting or private travel (within the meaning of [F70section 338 of ITEPA 2003 (travel for necessary attendance)];

[F71(b)section 339 of ITEPA 2003 (meaning of “workplace” and “permanent workplace”) shall apply as it applies for the purposes of section 338 of that Act]

(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).

[F72Travel 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.

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.

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.

Travel costs and expenses where duties performed abroad: visiting spouse’s[F73, 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[F74, 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.

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.

[F75Travel 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[F76, 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.]

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 [F77general earnings under section 305 of ITEPA 2003 (offshore oil and gas workers: mainland transfers).]

[F78Payments connected with cars and vans and exempt heavy goods vehicles provided for private use]U.K.

7.  A payment—

(a)by way of the discharge of any liability which by virtue of [F79section 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 [F80section 239(2)] of that Act;

is not treated as [F81general earnings] of the employment chargeable to income taxF82....

[F83Qualifying amounts of relevant motoring expenditureU.K.

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

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 [F84section 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 [F85section 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 [F86receives 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 [F87section 234 of ITEPA 2003].

(3) In this paragraph—

• “passenger payment” has the meaning given in [F88section 233(3) of ITEPA 2003]; and

• F89...

[F90Car 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.]]

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 [F91section 237 of ITEPA 2003], is not regarded as [F92general earnings] of the earner’s employment.

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

9.— [F93(1)]  For the avoidance of doubt, these shall be disregarded any specific and distinct payment of, or contribution towards, expenses which an employed earner actually incurs in carrying out his employment.

[F94This is subject to the following qualification.]

[F95(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, in excess of that permitted by the formula in paragraph (4) of that regulation.]

[F96council 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 [F97council 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 [F98sections 99 or 100 of ITEPA 2003 (accommodation provided for performance of duties or as a result of a security threat)], [F99he is not liable to income tax] F100... in respect of the provision of that accommodation.

This paragraph does not extend to Northern Ireland.

[F101rates 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 [F102rates 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 [F103sections 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 taxF104... 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 [F105section 299 of ITEPA 2003 (Crown employees' foreign service allowance)].

[F106HM Forces’ operational allowanceU.K.

12A.  A payment by the Secretary of State for Defence of an operational allowance to a member of Her Majesty’s forces in respect of service in an operational area specified by the Secretary of State for Defence.]

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.

[F107Experts 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).]

PART IXU.K. [F108Incentives by way of securities.]

[F109Certain payments by way of securities, restricted securities and restricted interests in securities, and gains arising from them, disregarded]U.K.

1.—[F109(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.

F1102.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F111 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.

F1123A.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Enterprise management incentivesU.K.

F1134.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F114Priority share allocations]U.K.

[F1145.  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 [F115paragraph 44 of Schedule 2 to ITEPA 2003.]

[F116Shares 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.

F1178.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F118 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.

F11910.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Convertible sharesU.K.

F11911.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

F11912.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Share option gains by directors and employeesU.K.

F11913.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

F11914.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Assignment or release of optionU.K.

F11915.  . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F120 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.]

[F121Payments 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 [F122or 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 [F123replacement right], includes the shares subject to [F124a 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.]

PART XU.K. MISCELLANEOUS AND SUPPLEMENTAL

Other miscellaneous payments to be disregardedU.K.

1.—(1) The payments listed in paragraphs [F1252 to 17] 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.

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 [F126relevant employment income]) F127.

Payments by way of incidental [F128overnight ] expensesU.K.

4.—[F129(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.

[F130(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 [F131which—

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

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

(2) [F132The 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) [F133The condition in this sub-paragraph] is that the secondary contributor does not allocate the payment, directly or indirectly, to the earner.

[F134(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.

Expenses and other payments not charged to tax under Extra-Statutory ConcessionsU.K.

8.  A payment which is not charged to tax under Schedule E by virtue of the following Inland Revenue Extra-Statutory Concessions as published at 1st September 2000—

(a)A57 (staff suggestion schemes);

(b)A58 (travelling and subsistence allowance when public transport disrupted);

(c)A59 (disabled persons’ home to work travel);

(d)A66 (employees’ journeys home: late night travel and breakdown in car sharing arrangements).

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.

Employee’s indemnity insuranceU.K.

10.  A payment which by virtue of section 201AA of the Taxes Act (employee liabilities and indemnity insurance) F135 is deductible from the emoluments of the employment chargeable to tax under Schedule E.

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.

Holiday payU.K.

12.  A 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.

[F136 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 paragraph, “colliery worker” means a coal 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.

[F137Rewards 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.]

[F138Student 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.]

[F139Payment 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).]