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Income Tax (Earnings and Pensions) Bill


Income Tax (Earnings and Pensions) Bill
Schedule 6 — Consequential Amendments
Part 2 — Other enactments

    501

 

              (b)             for “emoluments” in the first place where it occurs substitute

“earnings”; and

              (c)             for “foreign emoluments within the meaning of section 192”

substitute “earnings and amounts treated as earnings to which

subsection (6D) applies”.

5

          (3)      After subsection (6C) insert—

                              “(6D) This subsection applies to earnings and amounts treated as

earnings for a year of assessment if—

                    (a)                   the employer or office-holder is not domiciled in the United

Kingdom in that year, and

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                    (b)                   the employment is with a foreign employer.

                              (6E) If there is a dispute as to whether the employee or office-holder

is not domiciled in the United Kingdom, sections 42 and 43 of the

Income Tax (Earnings and Pensions) Act 2003 (Board to determine

dispute as to domicile) apply to the dispute as they apply to a dispute

15

mentioned in section 42(1) of that Act.”

          (4)      In subsection (7)—

              (a)             after “this section” insert—

                                      ““earnings and amounts treated as earnings” means earnings

and amounts treated as earnings which constitute

20

employment income (see section 7(2)(a) or (b) of ITEPA 2003);

                                      “foreign employer” has the meaning given by section 721 of that

Act;”; and

              (b)             for “section 596(1)(a), (b) or (c) of the Taxes Act 1988” substitute

“section 387(2) of the Income Tax (Earnings and Pensions) Act 2003”.

25

  162      In section 178(2) (setting of rates of interest)—

              (a)             in paragraph (m) omit the words “160,”,

              (b)             at the end of the first paragraph (p) omit the word “and”,

              (c)             renumber the second paragraph (p) as paragraph (q), and

              (d)             at the end of paragraph (q) insert “, and

30

                           (r)                             Chapter 7 of Part 3 of the Income Tax (Earnings and

Pensions) Act 2003.”.

  163     (1)      Amend Schedule 5 (employee share ownership trusts) as follows.

          (2)      In paragraph 4(2A) (beneficiaries)—

              (a)             for “a savings-related share option scheme within the meaning of

35

Schedule 9 to the Taxes Act 1988” substitute “an SAYE option

scheme”, and

              (b)             in paragraph (b), for “that Schedule” substitute “Schedule 3 to the

Income Tax (Earnings and Pensions) Act 2003”.

          (3)      In paragraph 9(2ZA)(b) (transfers of securities on qualifying terms)—

40

              (a)             for “a savings-related share option scheme within the meaning of

Schedule 9 to the Taxes Act 1988” substitute “an SAYE option

scheme”, and

              (b)             in sub-paragraph (ii), for “that Schedule” substitute “Schedule 3 to

the Income Tax (Earnings and Pensions) Act 2003”.

45

          (4)      In paragraph 10 (other features)—

 

 

Income Tax (Earnings and Pensions) Bill
Schedule 6 — Consequential Amendments
Part 2 — Other enactments

    502

 

              (a)             for “savings-related share option schemes approved under Schedule

9 to the Taxes Act 1988” substitute “SAYE option schemes approved

under Schedule 3 to the Income Tax (Earnings and Pensions) Act

2003”; and

              (b)             for “that Schedule” substitute “Schedule 9 to the Taxes Act 1988”.

5

          (5)      After paragraph 17 insert—

          “18                  For the purposes of this Schedule “SAYE option scheme” has the

same meaning as in the SAYE code (see section 516 of the Income

Tax (Earnings and Pensions) Act 2003) (approved SAYE option

schemes).”

10

Insolvency (Northern Ireland) Order 1989 (S.I. 1989/2405 (N.I. 19))

  164      In paragraph 1 of Schedule 4 to the Insolvency (Northern Ireland) Order

1989 (the categories of preferential debts)—

              (a)             in sub-paragraph (1), for “emoluments” substitute “taxable earnings

(as defined by section 10 of the Income Tax (Earnings and Pensions)

15

Act 2003)”; and

              (b)             in sub-paragraph (2), for “section 203 of the Income and Corporation

Taxes Act 1988 (pay as you earn)” substitute “regulations made

under section 684 of that Act (PAYE regulations)”.

Finance Act 1990 (c. 29)

20

  165      The Finance Act 1990 is amended as follows.

  166     (1)      Amend section 25(2) (donations to charity by individuals) as follows.

          (2)      In paragraph (d) for “section 202(2) of the Taxes Act 1988” substitute “section

713(3) of the Income Tax (Earnings and Pensions) Act 2003”.

          (3)      In paragraph (i) for “section 132(4)(a) of the Taxes Act 1988” substitute

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“section 28(2) of the Income Tax (Earnings and Pensions) Act 2003”.

  167     (1)      Amend paragraph 4 of Schedule 14 (amendments of sections 322 and 323 of

ICTA) as follows.

          (2)      In sub-paragraph (1) for “sections 322(1)(a) and (2) and 323(1)” substitute

“section 322(1)(a)”.

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          (3)      Omit sub-paragraph (2).

Finance Act 1991 (c. 31)

  168     (1)      Amend section 38 of the Finance Act 1991 (employee share-schemes: non-

discrimination) as follows.

          (2)      Omit subsection (2).

35

          (3)      In subsection (6) for “Subsections (2) and” substitute “Subsection”.

Social Security Contributions and Benefits Act 1992 (c. 4)

  169      The Social Security Contributions and Benefits Act 1992 is amended as

follows.

  170      In section 1 (outline of contributory system), in subsection (2)(bb) for

40

“emoluments” substitute “general earnings”.

 

 

Income Tax (Earnings and Pensions) Bill
Schedule 6 — Consequential Amendments
Part 2 — Other enactments

    503

 

  171      In section 2 (categories of earners), in subsection (1)(a) for “emoluments

chargeable to income tax under Schedule E” substitute “general earnings”.

  172     (1)      Amend section 4 (payments treated as remuneration and earnings) as

follows.

          (2)      For subsection (4)(a) substitute—

5

                           “(a)                             the amount of any gain calculated under section 479

or 480 of ITEPA 2003 in respect of which an amount

counts as employment income of the earner under

section 476 or 477 of that Act;”.

          (3)      In subsection (4)(b) for “section 313 of the 1988 Act” substitute “section 225

10

or 226 of ITEPA 2003”.

          (4)      In subsection (6)(a) for “Schedule E” substitute “the employment income

Parts of ITEPA 2003”.

  173      In section 7(1)(b) (meaning of “secondary contributor”) for “emoluments” in

both places where it occurs substitute “general earnings”.

15

  174     (1)      Amend section 10 (Class 1A National Insurance contributions: benefits in

kind etc.) as follows.

          (2)      For subsection (1)(a) substitute—

                    “(a)                      for any tax year an earner is chargeable to income tax under

ITEPA 2003 on an amount of general earnings received by

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him from any employment (“the relevant employment”),”.

          (3)      For subsection (1)(b) substitute—

                    “(b)                      the relevant employment is both—

                           (i)                          employed earner’s employment, and

                           (ii)                         an employment, other than an excluded employment,

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within the meaning of the benefits code (see Chapter

2 of Part 3 of ITEPA 2003),”.

          (4)      In subsection (1)(c) for “emolument” substitute “general earnings”.

          (5)      In subsection (1) in the words after paragraph (c) for “emolument” substitute

“general earnings”.

30

          (6)      In subsection (2)(b) for “emolument” substitute “general earnings”.

          (7)      In subsection (4)—

              (a)             for “emolument” substitute “general earnings”;

              (b)             for “it” substitute “them”.

          (8)      In subsection (6) for “emolument as is taken” substitute “general earnings as

35

are taken”.

          (9)      For subsection (7) substitute—

              “(7)                In calculating for the purposes of this section the amount of general

earnings received by an earner from an employment, a deduction

under any of the excluded provisions is to be disregarded.

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                              This subsection does not apply in relation to a deduction if

subsection (7A) applies in relation to it.

              (7A)                Where—

                    (a)                   a deduction in respect of a matter is allowed under an

excluded provision, and

45

 

 

Income Tax (Earnings and Pensions) Bill
Schedule 6 — Consequential Amendments
Part 2 — Other enactments

    504

 

                    (b)                   the amount deductible is at least equal to the whole of any

corresponding amount which would (but for this section) fall

by reference to that matter to be included in the general

earnings mentioned in subsection (7),

                              the whole of the corresponding amount shall be treated as not

5

included.

              (7B)                For the purposes of subsections (7) and (7A) “excluded provision”

means—

                    (a)                   any provision of Chapter 2 of Part 5 of ITEPA 2003

(deductions for employee’s expenses), other than section 352

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(limited deduction for agency fees paid by entertainers), and

                    (b)                   any provision of Chapter 5 of Part 5 of ITEPA 2003

(deductions for earnings representing benefits or reimbursed

expenses).”

          (10)     For subsection (8)(a) substitute—

15

                    “(a)                      modify the effect of subsections (7) and (7A) above by

amending subsection (7B) so as to include any enactment

contained in the Income Tax Acts within the meaning of

“excluded provision”; or”.

          (11)     In subsection (8)(b)—

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              (a)             for “subsection (7)” substitute “subsections (7) to (7B)”;

              (b)             for “under Schedule E” substitute “on employment income”.

          (12)     In subsection (9)(a) for “emoluments” substitute “general earnings”.

          (13)     Omit subsection (10).

  175     (1)      Amend section 10ZA (liability of third party provider of benefits in kind) as

25

follows.

          (2)      In subsection (1)(a) for “an emolument” substitute “general earnings”.

          (3)      Amend subsection (1)(b) as follows—

              (a)             for “the emolument, in so far as it is one in respect of which”

substitute “the general earnings, in so far as they are ones in respect

30

of which”;

              (b)             for “consists” substitute “consist”.

          (4)      In subsection (2), in the words after paragraph (b) for “an emolument”

substitute “general earnings”.

          (5)      In subsection (6) for “section 168(4) of the Income and Corporation Taxes Act

35

1988” substitute “section 721(5) of ITEPA 2003”.

  176     (1)      Amend section 10ZB (non-cash vouchers provided by third parties) as

follows.

          (2)      In subsection (2)(a) for the words from “employment” to the end of the

paragraph substitute “employment which is an excluded employment for

40

the purposes of the benefits code, and”.

          (3)      In subsection (2)(b) for “if that Chapter did apply to that employment”

substitute “if that employment were not an excluded employment”.

          (4)      In subsection (2), in the words following paragraph (b) for “as if that

employment were employment to which that Chapter applied” substitute

45

“as if that employment were not an excluded employment”.

 

 

Income Tax (Earnings and Pensions) Bill
Schedule 6 — Consequential Amendments
Part 2 — Other enactments

    505

 

          (5)      In subsection (3) for “section 141 of the Income and Corporation Taxes Act

1988” substitute “section 84 of ITEPA 2003”.

  177     (1)      Amend section 10A (Class 1B National Insurance contributions) as follows.

          (2)      In subsection (1) for “emoluments” substitute “general earnings”.

          (3)      In subsection (2)(a) for “the emoluments included” substitute “the general

5

earnings included”.

          (4)      In subsection (4) for “Emoluments are chargeable emoluments” substitute

“General earnings are chargeable emoluments”.

          (5)      In subsection (5) for “emoluments” in both places where it occurs substitute

“general earnings”.

10

  178     (1)      Amend section 122(1) (interpretation of Parts 1 to 6 and supplementary

provisions) as follows.

          (2)      Insert the following definitions in the appropriate places—

                                      ““the benefits code” has the meaning given by section 63(1) of

ITEPA 2003;”.

15

                                      ““the employment income Parts of ITEPA 2003” means Parts 2

to 7 of that Act;”.

                                      ““excluded employment” has the meaning given by section

63(4) of ITEPA 2003;”.

                                      ““general earnings” has the meaning given by section 7 of

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ITEPA 2003 and accordingly sections 3 and 112 of this Act do

not apply in relation to the word “earnings” when used in the

expression “general earnings”;”.

                                      ““ITEPA 2003” means the Income Tax (Earnings and Pensions)

Act 2003;”.

25

          (3)      In the definition of “PAYE settlement agreement” for “section 206A of the

Income and Corporation Taxes Act 1988” substitute “Chapter 5 of Part 11 of

ITEPA 2003”.

  179      In section 126(5)(a)(ii) (trade disputes) for “emoluments in pursuance of

section 203 of the Income and Corporation Taxes Act 1988 (PAYE)”

30

substitute “taxable earnings (as defined by section 10 of the Income Tax

(Earnings and Pensions) Act 2003) under PAYE regulations”.

  180     (1)      Amend section 150(2) (interpretation of Part 10) as follows.

          (2)      In paragraph (b) of the definition of “unemployability supplement or

allowance”—

35

              (a)             in sub-paragraph (ii) for “section 315(1) of the Income and

Corporation Taxes Act 1988” substitute “section 641 of the Income

Tax (Earnings and Pensions) Act 2003”;

              (b)             omit sub-paragraph (v).

          (3)      In paragraph (b) of the definition of “war disablement pension” for

40

“subsection (1) of section 315 of the Income and Corporation Taxes Act 1988”

substitute “any of paragraphs (a) to (f) of section 641(1) of the Income Tax

(Earnings and Pensions) Act 2003”.

          (4)      In the definition of “war widow’s pension” for “subsection (2)(e) of the said

section 315” substitute “section 641(1)(e) or (f) of the Income Tax (Earnings

45

and Pensions) Act 2003”.

 

 

Income Tax (Earnings and Pensions) Bill
Schedule 6 — Consequential Amendments
Part 2 — Other enactments

    506

 

  181      In section 163(1) (interpretation of Part 11), in paragraph (a) of the definition

of “employee” for “emoluments chargeable to income tax under Schedule E”

substitute “general earnings (as defined by section 7 of the Income Tax

(Earnings and Pensions) Act 2003)”.

  182      In section 171(1) (interpretation of Part 12), in paragraph (a) of the definition

5

of “employee” for “emoluments chargeable to income tax under Schedule E”

substitute “general earnings (as defined by section 7 of the Income Tax

(Earnings and Pensions) Act 2003)”.

  183      In section 171ZJ(2)(a) (Part 12ZA: supplementary) for “emoluments

chargeable to income tax under Schedule E” substitute “general earnings (as

10

defined by section 7 of the Income Tax (Earnings and Pensions) Act 2003)”.

  184      In section 171ZS(2)(a) (Part 12ZB: supplementary) for “emoluments

chargeable to income tax under Schedule E” substitute “general earnings (as

defined by section 7 of the Income Tax (Earnings and Pensions) Act 2003)”.

  185      In Schedule 1 (supplementary provisions relating to contributions of Classes

15

1, 1A, 1B, 2 and 3)—

              (a)             in paragraph 6(1)(a) for “regulations under section 203 of the Income

and Corporation Taxes Act 1988 (PAYE)” substitute “PAYE

regulations”;

              (b)             in paragraph 6(1)(b) for “regulations under that section” substitute

20

“PAYE regulations”;

              (c)             in paragraph 6(7) for “regulations made under section 203 of the

Income and Corporation Taxes Act 1988 (PAYE)” substitute “PAYE

regulations”.

              (d)             in paragraph 7(1)(a) for “regulations made by the Inland Revenue

25

under section 203(2) or” substitute “PAYE regulations or regulations

made under section”; and

              (e)             in paragraph 7B(1) for “regulations under section 203 of the Income

and Corporation Taxes Act 1988 (PAYE)” substitute “PAYE

regulations”.

30

Social Security Administration Act 1992 (c. 5)

  186      The Social Security Administration Act 1992 is amended as follows.

  187     (1)      Amend section 139(11) (definitions used in provisions relating to

arrangements for council tax benefit) as follows.

          (2)      In paragraph (b) of the definition of “war disablement pension” for

35

“subsection (1) of section 315 of the Income and Corporation Taxes Act 1988”

substitute “any of paragraphs (a) to (f) of section 641(1) of the Income Tax

(Earnings and Pensions) Act 2003”.

          (3)      In the definition of “war widow’s pension” for “section 315(2)(e) of the

Income and Corporation Taxes Act 1988” substitute “section 641(1)(e) or (f)

40

of the Income Tax (Earnings and Pensions) Act 2003”.

  188     (1)      Amend section 159B(6) (effect of alterations affecting state pension credit) as

follows.

          (2)      In paragraph (b) of the definition of “war disablement pension” for

“subsection (1) of section 315 of the Income and Corporation Taxes Act 1988”

45

substitute “any of paragraphs (a) to (f) of section 641(1) of the Income Tax

(Earnings and Pensions) Act 2003”.

 

 

Income Tax (Earnings and Pensions) Bill
Schedule 6 — Consequential Amendments
Part 2 — Other enactments

    507

 

          (3)      In paragraph (b) of the definition of “war widow’s or widower’s pension”

for “section 315(2)(e) of the Income and Corporation Taxes Act 1988”

substitute “section 641(1)(e) or (f) of the Income Tax (Earnings and Pensions)

Act 2003”.

  189     (1)      Amend section 162(5) (destination of national insurance contributions) as

5

follows.

          (2)      In paragraph (c) for “emoluments” substitute “general earnings”.

          (3)      In paragraph (ca) for “emoluments” substitute “general earnings”.

Social Security Contributions and Benefits (Northern Ireland) Act 1992 (c. 7)

  190      The Social Security Contributions and Benefits (Northern Ireland) Act 1992

10

is amended as follows.

  191      In section 1 (outline of contributory system), in subsection (2)(bb) for

“emoluments” substitute “general earnings”.

  192      In section 2 (categories of earners), in subsection (1)(a) for “emoluments

chargeable to income tax under Schedule E” substitute “general earnings”.

15

  193     (1)      Amend section 4 (payments treated as remuneration and earnings) as

follows.

          (2)      For subsection (4)(a) substitute—

                           “(a)                             the amount of any gain calculated under section 479

or 480 of ITEPA 2003 in respect of which an amount

20

counts as employment income of the earner under

section 476 or 477 of that Act;”.

          (3)      In subsection (4)(b) for “section 313 of the 1988 Act” substitute “section 225

or 226 of ITEPA 2003”.

          (4)      In subsection (6)(a) for “Schedule E” substitute “the employment income

25

Parts of ITEPA 2003”.

  194      In section 7(1)(b) (meaning of “secondary contributor”) for “emoluments” in

both places where it occurs substitute “general earnings”.

  195     (1)      Amend section 10 (Class 1A National Insurance contributions: benefits in

kind etc.) as follows.

30

          (2)      For subsection (1)(a) substitute—

                    “(a)                      for any tax year an earner is chargeable to income tax under

ITEPA 2003 on an amount of general earnings received by

him from any employment (‘the relevant employment’),”.

          (3)      For subsection (1)(b) substitute—

35

                    “(b)                      the relevant employment is both—

                           (i)                          employed earner’s employment, and

                           (ii)                         an employment, other than an excluded employment,

for the purposes of the benefits code (see Chapter 2 of

Part 3 of ITEPA 2003),”.

40

          (4)      In subsection (1)(c) for “emolument” substitute “general earnings”.

          (5)      In subsection (1), in the words after paragraph (c) for “emolument”

substitute “general earnings”.

          (6)      In subsection (2)(b) for “emolument” substitute “general earnings”.

 

 

 
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