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Passenger payments | |
233 Passenger payments | |
(1) No liability to income tax arises in respect of approved passenger payments | |
made to an employee for the use of a car or van (whether or not it is a company | |
vehicle) if— | 5 |
(a) the employee receives mileage allowance payments for the use of the | |
car or van, and | |
(b) the cash equivalent of the benefit of the car or van is treated as earnings | |
from the employment by virtue of section 120 or 154 (cars and vans as | |
benefits). | 10 |
This is subject to subsection (2). | |
(2) The condition in subsection (1)(b) needs to be met only if the car or van is made | |
available to the employee by reason of the employment. | |
(3) Passenger payments are amounts paid to an employee because, while using a | |
car or van for business travel, the employee carries in it one or more passengers | 15 |
who are also employees for whom the travel is business travel. | |
(4) Passenger payments are approved if, or to the extent that, for a tax year, the | |
total amount of all such payments made to the employee does not exceed the | |
approved amount for such payments (see section 234). | |
(5) Section 117 (when cars and vans are made available by reason of employment) | 20 |
applies for the purposes of subsection (2). | |
234 The approved amount for passenger payments | |
(1) The approved amount for passenger payments is— | |
![equation: cross[char[M],char[R]]](missing.gif) | |
where— | 25 |
M is the number of miles of business travel by the employee by car or | |
van— | |
(a) for which the employee carries in the tax year in question one or | |
more passengers who are also employees for whom the travel is | |
business travel, and | 30 |
(b) in respect of which passenger payments are made; | |
R is a rate of 5p per mile. | |
(2) If the employee carries for all or part of the tax year two or more passengers | |
who are also employees for whom the travel is business travel, the approved | |
amount for passenger payments is the total of the amounts calculated | 35 |
separately under subsection (1) in respect of each of those passengers. | |
(3) The Treasury may by regulations amend subsection (1) so as to alter the rate. | |
Supplementary | |
235 Vehicles to which this Chapter applies | |
(1) This Chapter applies to cars, vans, motor cycles and cycles. | 40 |
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(2) “Car” means a mechanically propelled road vehicle which is not— | |
(a) a goods vehicle, | |
(b) a motor cycle, or | |
(c) a vehicle of a type not commonly used as a private vehicle and | |
unsuitable to be so used. | 5 |
(3) “Van” means a mechanically propelled road vehicle which— | |
(a) is a goods vehicle, and | |
(b) has a design weight not exceeding 3,500 kilograms, | |
and which is not a motor cycle. | |
(4) “Motor cycle” has the meaning given by section 185(1) of the Road Traffic Act | 10 |
1988 (c. 52). | |
(5) “Cycle” has the meaning given by section 192(1) of that Act. | |
(6) In this section— | |
“design weight” means the weight which a vehicle is designed or adapted | |
not to exceed when in normal use and travelling on a road laden; | 15 |
“goods vehicle” means a vehicle of a construction primarily suited for the | |
conveyance of goods or burden of any description. | |
236 Interpretation of this Chapter | |
(1) In this Chapter— | |
“business travel” means travelling the expenses of which, if incurred and | 20 |
paid by the employee in question, would (if this Chapter did not apply) | |
be deductible under sections 337 to 342; | |
“mileage allowance payments” has the meaning given by section 229(2); | |
“passenger payments” has the meaning given by section 233(3). | |
(2) For the purposes of this Chapter a vehicle is a “company vehicle” in a tax year | 25 |
if in that year— | |
(a) the vehicle is made available to the employee by reason of the | |
employment and is not available for the employee’s private use, or | |
(b) the cash equivalent of the benefit of the vehicle is to be treated as the | |
employee’s earnings for the tax year by virtue of— | 30 |
(i) section 120 (benefit of car treated as earnings), | |
(ii) section 154 (benefit of van treated as earnings), or | |
(iii) section 203 (cash equivalent of benefit treated as earnings), or | |
(c) in the case of a car or van, the cash equivalent of the benefit of the car | |
or van would be required to be so treated if sections 167 and 168 | 35 |
(exceptions for pooled cars and vans) did not apply, or | |
(d) in the case of a cycle, the cash equivalent of the benefit of the cycle | |
would be required to be treated as the employee’s earnings for the tax | |
year under Chapter 10 of Part 3 (taxable benefits: residual liability to | |
charge) if section 244(1) (exception for cycles made available) did not | 40 |
apply. | |
(3) Sections 117 and 118 (when cars and vans are made available by reason of | |
employment and are made available for private use) apply for the purposes of | |
subsection (2). | |
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Chapter 3 | |
Exemptions: other transport, travel and subsistence | |
237 Parking provision and expenses | |
(1) No liability to income tax arises by virtue of Chapter 10 of Part 3 (taxable | |
benefits: residual liability to charge) in respect of the provision of workplace | 5 |
parking for an employee. | |
(2) No liability to income tax arises by virtue of the payment or reimbursement of | |
expenses incurred in connection with the provision for or the use by an | |
employee of workplace parking. | |
(3) In this section “workplace parking” means— | 10 |
(a) a car parking space, | |
(b) a motor cycle parking space, or | |
(c) facilities for parking a cycle other than a motor cycle, | |
at or near the employee’s workplace. | |
238 Modest private use of heavy goods vehicles | 15 |
(1) No liability to income tax arises where a heavy goods vehicle is made available | |
to an employee for the employee’s private use if conditions A and B are met. | |
(2) Condition A is that there is no transfer of the property in the vehicle to the | |
employee. | |
(3) Condition B is that the employee’s use of the vehicle in the tax year is not | 20 |
wholly or mainly private use. | |
(4) In this section— | |
“heavy goods vehicle” means a mechanically propelled road vehicle | |
which— | |
(a) is of a construction primarily suited for the conveyance of goods | 25 |
or burden of any kind, and | |
(b) is designed or adapted to have a maximum weight exceeding | |
3,500 kilograms when in normal use and travelling on a road | |
laden, and | |
“private use” means use other than for travel which the employee is | 30 |
necessarily obliged to do in the performance of the duties of the | |
employment. | |
239 Payments and benefits connected with taxable cars and vans and exempt | |
heavy goods vehicles | |
(1) No liability to income tax arises in respect of the discharge of any liability of an | 35 |
employee in connection with a taxable car or van or an exempt heavy goods | |
vehicle. | |
(2) No liability to income tax arises in respect of a payment to an employee in | |
respect of expenses incurred by the employee in connection with a taxable car | |
or van or an exempt heavy goods vehicle. | 40 |
(3) Subsections (1) and (2) do not apply to liability arising by virtue of section 149 | |
(benefit of car fuel treated as earnings). | |
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(4) No liability to income tax arises by virtue of Chapter 10 of Part 3 (taxable | |
benefits: residual liability to charge) in respect of a benefit connected with a | |
taxable car or van or an exempt heavy goods vehicle. | |
(5) Subsection (4) does not apply to the provision of a driver. | |
(6) For the purposes of this section a car or van is “taxable” if under Chapter 6 of | 5 |
Part 3 the cash equivalent of the benefit of it is to be treated as the employee’s | |
earnings for the tax year. | |
(7) For the purposes of this section— | |
(a) “heavy goods vehicle” has the same meaning as in section 238(4) | |
(modest private use of heavy goods vehicles), and | 10 |
(b) a heavy goods vehicle is “exempt” if it is made available in the tax year | |
to the employee in such circumstances that section 238 applies. | |
(8) For the purposes of subsections (1) and (2), a heavy goods vehicle is also | |
“exempt” if it is so made available in such circumstances that section 238 would | |
apply if the employee were not in excluded employment. | 15 |
(9) In this Part “excluded employment” means an excluded employment within | |
the meaning of the benefits code (see section 63(4)). | |
240 Incidental overnight expenses and benefits | |
(1) No liability to income tax arises in respect of a sum if or to the extent that it is | |
paid wholly and exclusively for the purpose of paying or reimbursing | 20 |
expenses which— | |
(a) are incidental to the employee’s absence from the place where the | |
employee normally lives, | |
(b) relate to a continuous period of such absence in relation to which the | |
overnight stay conditions are met (a “qualifying period”), and | 25 |
(c) would not be deductible under Part 5 if the employee incurred and paid | |
them and Chapter 2 of this Part (mileage allowances and passenger | |
payments) did not apply. | |
(2) No liability to income tax arises by virtue of Chapter 10 of Part 3 (taxable | |
benefits: residual liability to charge) in respect of a benefit provided for an | 30 |
employee if— | |
(a) its provision is incidental to such an absence during a qualifying | |
period, and | |
(b) no amount would be deductible in respect of it under Part 5. | |
(3) Subsections (1) and (2) are subject to section 241 (incidental overnight expenses | 35 |
and benefits: overall exemption limit). | |
(4) The overnight stay conditions are that— | |
(a) the employee is obliged to stay away from the place where the | |
employee normally lives throughout the period, | |
(b) the period includes at least one overnight stay away from that place, | 40 |
and | |
(c) each such overnight stay during the period is at a place the expenses of | |
travelling to which meet condition A or B. | |
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(5) Condition A is that the expenses are deductible under Part 5 (otherwise than | |
under any of the excepted foreign travel provisions) or would be if the | |
employee incurred and paid them and Chapter 2 of this Part did not apply. | |
(6) Condition B is that the expenses are within section 250 or 255 (exemption of | |
work-related and individual learning account training provision) or would be | 5 |
if the employer paid or reimbursed them. | |
(7) In this section “excepted foreign travel provisions” means— | |
(a) section 371 (travel costs and expenses where duties performed abroad: | |
visiting spouse’s or child’s travel), | |
(b) section 374 (non-domiciled employee’s spouse’s or child’s travel costs | 10 |
and expenses where duties performed in UK), and | |
(c) section 376 (foreign accommodation and subsistence costs and | |
expenses (overseas employments)). | |
241 Incidental overnight expenses and benefits: overall exemption limit | |
(1) Section 240(1) and (2) do not apply if the exemption provisions total in respect | 15 |
of the qualifying period in question exceeds the permitted amount. | |
(2) In this section “the exemption provisions total”, in respect of a period, means | |
the aggregate of— | |
(a) the amounts that would be exempted under section 240(1) and (2) in | |
respect of the period, apart from this section, and | 20 |
(b) the amounts that would be exempted under section 268 (exemption of | |
vouchers and tokens for incidental overnight expenses) in respect of the | |
period, apart from the condition in section 268(5). | |
(3) In this section “the permitted amount”, in respect of a period, means the | |
aggregate of the following amounts— | 25 |
(a) £5 for each night during the period spent wholly in the United | |
Kingdom, and | |
(b) £10 for each night during the period spent wholly or partly outside the | |
United Kingdom. | |
242 Works transport services | 30 |
(1) No liability to income tax arises in respect of the provision for employees of a | |
works transport service if— | |
(a) the service is available generally to employees of the employer (or each | |
employer) concerned, | |
(b) the main use of the service is for qualifying journeys by those | 35 |
employees, and | |
(c) the service— | |
(i) is used only by the employees for whom it is provided or their | |
children, or | |
(ii) is substantially used only by those employees or children. | 40 |
(2) In this section— | |
“children” includes stepchildren and illegitimate children but does not | |
include children aged 18 or over, and | |
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“works transport service” means a service which is provided by means of | |
a bus or a minibus for conveying employees of one or more employers | |
on qualifying journeys. | |
(3) For the purposes of this section— | |
(a) “bus” means a road passenger vehicle which has a seating capacity of | 5 |
12 or more, and | |
(b) “minibus” means a vehicle constructed or adapted for the carriage of | |
passengers which has a seating capacity of 9, 10 or 11. | |
(4) But a vehicle which falls within the definition in subsection (3)(b) is not a | |
minibus for the purposes of this section if— | 10 |
(a) it has one or more disqualified seats, and | |
(b) excluding the disqualified seats, it has a seating capacity of 8 or less. | |
(5) For the purposes of subsections (3) and (4) the seating capacity of a vehicle is | |
determined in the same way as for the purposes of Part 3 of Schedule 1 to | |
VERA 1994 (vehicle excise duty on buses). | 15 |
This applies whether or not the vehicle is a bus within the meaning of that Part | |
of that Schedule. | |
(6) For the purposes of subsection (4) a seat is disqualified if relevant construction | |
and use requirements are not met in relation to it. | |
In this subsection “construction and use requirements” has the same meaning | 20 |
as in Part 2 of the Road Traffic Act 1988 (c. 52) or, in Northern Ireland, Part III | |
of the Road Traffic (Northern Ireland) Order 1995 (S.I. 1995/2994 (N.I. 18)). | |
243 Support for public bus services | |
(1) No liability to income tax arises in respect of the provision of financial or other | |
support for a public transport road service if— | 25 |
(a) in the case of a local bus service, conditions A and B are met, or | |
(b) in any other case, conditions A to C are met. | |
(2) Condition A is that the service is used by employees of one or more employers | |
for qualifying journeys. | |
(3) Condition B is that the service is available generally to employees of the | 30 |
employer (or each employer) concerned. | |
(4) Condition C is that the terms on which the service is available to the employees | |
of the employer (or each employer) concerned are not more favourable than | |
those available to other passengers. | |
(5) In this section— | 35 |
“local bus service” means a local service (as defined in section 2 of the | |
Transport Act 1985 (c. 67)), and | |
“public transport road service” means a public passenger transport | |
service provided by means of a road vehicle. | |
244 Cycles and cyclist’s safety equipment | 40 |
(1) No liability to income tax arises by virtue of Chapter 10 of Part 3 (taxable | |
benefits: residual liability to charge) in respect of the provision for an employee | |
of a cycle or cyclist’s safety equipment if conditions A to C are met. | |
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(2) Condition A is that there is no transfer of the property in the cycle or | |
equipment in question. | |
(3) Condition B is that the employee uses the cycle or equipment in question | |
mainly for qualifying journeys. | |
(4) Condition C is that cycles are available generally to employees of the employer | 5 |
concerned or, as the case may be, cyclist’s safety equipment is so available to | |
them. | |
(5) In this section “cycle” has the meaning given by section 192(1) of the Road | |
Traffic Act 1988 (c. 52), and “cyclist” has a corresponding meaning. | |
245 Travelling and subsistence during public transport strikes | 10 |
(1) No liability to income tax arises in respect of the following benefits and | |
payments where a strike or other industrial action disrupts a public transport | |
service normally used by an employee. | |
(2) They are— | |
(a) the provision for the employee of overnight accommodation at or near | 15 |
the employee’s permanent workplace, | |
(b) a payment to the employee in respect of expenses incurred by the | |
employee in connection with such accommodation, | |
(c) the provision for the employee of transport for the purpose of ordinary | |
commuting or travel between any two places that is for practical | 20 |
purposes substantially ordinary commuting, and | |
(d) a payment to the employee in respect of expenses incurred on such | |
transport. | |
246 Transport between work and home for disabled employees: general | |
(1) No liability to income tax arises in respect of— | 25 |
(a) the provision of transport for a disabled employee, or | |
(b) the payment or reimbursement of expenses incurred on such transport, | |
if the condition in subsection (2) is met. | |
(2) The condition is that the transport is provided or the expenses are incurred for | |
the purpose of ordinary commuting or travel between any two places that is | 30 |
for practical purposes substantially ordinary commuting. | |
(3) Subsection (1) does not apply in a case where a car is made available to a | |
disabled employee (but see section 247). | |
(4) In this section “disabled employee” means an employee who has a physical or | |
mental impairment with a substantial and long-term adverse effect on the | 35 |
employee’s ability to carry out normal day to day activities. | |
247 Provision of cars for disabled employees | |
(1) This section applies where a car is made available to a disabled employee | |
without any transfer of the property in it. | |
(2) No liability to income tax arises by virtue of Chapter 6 or 10 of Part 3 (taxable | 40 |
benefits: cars, vans etc. and residual liability to charge) in respect of the benefit | |
if conditions A to C are met. | |
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