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Chapter 4 (vouchers and credit-tokens), | |
Chapter 5 (living accommodation), and | |
Chapter 11 (exclusion of lower-paid employments from parts of benefits | |
code). | |
(3) Section 216(5) and (6) explain and restrict the effect of section 216(1). | 5 |
(4) In the benefits code “excluded employment” means an employment to which | |
the exclusion in section 216(1) applies. | |
64 Relationship between earnings and benefits code | |
(1) This section applies if, apart from this section, the same benefit would give rise | |
to two amounts (“A” and “B”)— | 10 |
(a) A being an amount of earnings as defined in Chapter 1 of this Part, and | |
(b) B being an amount to be treated as earnings under the benefits code. | |
(2) In such a case— | |
(a) A constitutes earnings as defined in Chapter 1 of this Part, and | |
(b) the amount (if any) by which B exceeds A is to be treated as earnings | 15 |
under the benefits code. | |
(3) This section does not apply in connection with living accommodation to which | |
Chapter 5 of this Part applies. | |
(4) In that case section 109 applies to determine the relationship between that | |
Chapter and Chapter 1 of this Part. | 20 |
(5) This section does not apply if section 193 (notional loan where acquisition of | |
shares made for less than market value) applies. | |
(6) In that case sections 194 (amount of notional loan) and 196 (effects on other | |
income tax charges) apply to determine the relationship between Chapters 1 | |
and 8 of this Part. | 25 |
65 Dispensations relating to benefits within provisions not applicable to lower- | |
paid employment | |
(1) This section applies for the purposes of the listed provisions where a person | |
(“P”) supplies the Inland Revenue with a statement of the cases and | |
circumstances in which— | 30 |
(a) payments of a particular character are made to or for any employees, or | |
(b) benefits or facilities of a particular kind are provided for any | |
employees, | |
whether they are employees of P or some other person. | |
(2) The “listed provisions” are the provisions listed in section 216(4) (provisions of | 35 |
the benefits code which do not apply to lower-paid employments). | |
(3) If the Inland Revenue are satisfied that no additional tax is payable by virtue of | |
the listed provisions by reference to the payments, benefits or facilities | |
mentioned in the statement, they must give P a dispensation under this section. | |
(4) A “dispensation” is a notice stating that the Inland Revenue agree that no | 40 |
additional tax is payable by virtue of the listed provisions by reference to the | |
payments, benefits or facilities mentioned in the statement supplied by P. | |
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(5) If a dispensation is given under this section, nothing in the listed provisions | |
applies to the payments, or the provision of the benefits or facilities, covered | |
by the dispensation or otherwise has the effect of imposing any additional | |
liability to tax in respect of them. | |
(6) If in their opinion there is reason to do so, the Inland Revenue may revoke a | 5 |
dispensation by giving a further notice to P. | |
(7) That notice may revoke the dispensation from— | |
(a) the date when the dispensation was given, or | |
(b) a later date specified in the notice. | |
(8) If the notice revokes the dispensation from the date when the dispensation was | 10 |
given— | |
(a) any liability to tax that would have arisen if the dispensation had never | |
been given is to be treated as having arisen, and | |
(b) P and the employees in question must make all the returns which they | |
would have had to make if the dispensation had never been given. | 15 |
(9) If the notice revokes the dispensation from a later date— | |
(a) any liability to tax that would have arisen if the dispensation had | |
ceased to have effect on that date is to be treated as having arisen, and | |
(b) P and the employees in question must make all the returns which they | |
would have had to make if the dispensation had ceased to have effect | 20 |
on that date. | |
General definitions for benefits code | |
66 Meaning of “employment” and related expressions | |
(1) In the benefits code— | |
(a) “employment” means a taxable employment under Part 2, and | 25 |
(b) “employed”, “employee” and “employer” have corresponding | |
meanings. | |
(2) Where a Chapter of the benefits code applies in relation to an employee— | |
(a) references in that Chapter to “the employment” are to the employment | |
of that employee, and | 30 |
(b) references in that Chapter to “the employer” are to the employer in | |
respect of that employment. | |
(3) For the purposes of the benefits code an employment is a “taxable employment | |
under Part 2” in a tax year if the earnings from the employment for that year | |
are (or would be if there were any) general earnings to which the charging | 35 |
provisions of Chapter 4 or 5 of Part 2 apply. | |
(4) In subsection (3)— | |
(a) the reference to an employment includes employment as a director of a | |
company, and | |
(b) “earnings” means earnings as defined in Chapter 1 of this Part. | 40 |
67 Meaning of “director” and “full-time working director” | |
(1) In the benefits code “director” means— | |
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(a) in relation to a company whose affairs are managed by a board of | |
directors or similar body, a member of that body, | |
(b) in relation to a company whose affairs are managed by a single director | |
or similar person, that director or person, and | |
(c) in relation to a company whose affairs are managed by the members | 5 |
themselves, a member of the company, | |
and includes any person in accordance with whose directions or instructions | |
the directors of the company (as defined above) are accustomed to act. | |
(2) For the purposes of subsection (1) a person is not to be regarded as a person in | |
accordance with whose directions or instructions the directors of the company | 10 |
are accustomed to act merely because the directors act on advice given by that | |
person in a professional capacity. | |
(3) In the benefits code “full-time working director” means a director who is | |
required to devote substantially the whole of his time to the service of the | |
company in a managerial or technical capacity. | 15 |
68 Meaning of “material interest” in a company | |
(1) For the purposes of the benefits code a person has a material interest in a | |
company if condition A or B is met. | |
(2) Condition A is that the person (with or without one or more associates) or any | |
associate of that person (with or without one or more such associates) is— | 20 |
(a) the beneficial owner of, or | |
(b) able to control, directly or through the medium of other companies or | |
by any other indirect means, | |
more than 5% of the ordinary share capital of the company. | |
(3) Condition B is that, in the case of a close company, the person (with or without | 25 |
one or more associates) or any associate of that person (with or without one or | |
more such associates), possesses or is entitled to acquire, such rights as | |
would— | |
(a) in the event of the winding-up of the company, or | |
(b) in any other circumstances, | 30 |
give an entitlement to receive more than 5% of the assets which would then be | |
available for distribution among the participators. | |
(4) In this section— | |
“associate” has the meaning given by section 417(3) of ICTA except that, | |
for this purpose, “relative” in section 417(3) has the meaning given by | 35 |
subsection (5) below, and | |
“participator” has the meaning given by section 417(1) of ICTA. | |
(5) For the purposes of this section a person (“A”) is a relative of another (“B”) if A | |
is— | |
(a) B’s spouse, | 40 |
(b) a parent, child or remoter relation in the direct line either of B or of B’s | |
spouse, | |
(c) a brother or sister of B or of B’s spouse, or | |
(d) the spouse of a person falling within paragraph (b) or (c). | |
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69 Extended meaning of “control” | |
(1) The definition of “control” in section 840 of ICTA (which is applied for the | |
purposes of this Act by section 719) is extended as follows. | |
(2) For the purposes of the benefits code that definition applies (with the necessary | |
modifications) in relation to an unincorporated association as it applies in | 5 |
relation to a body corporate. | |
Chapter 3 | |
Taxable benefits: expenses payments | |
70 Sums in respect of expenses | |
(1) This Chapter applies to a sum paid to an employee in a tax year if the sum— | 10 |
(a) is paid to the employee in respect of expenses, and | |
(b) is so paid by reason of the employment. | |
(2) This Chapter applies to a sum paid away by an employee in a tax year if the | |
sum— | |
(a) was put at the employee’s disposal in respect of expenses, | 15 |
(b) was so put by reason of the employment, and | |
(c) is paid away by the employee in respect of expenses. | |
(3) For the purposes of this Chapter it does not matter whether the employment is | |
held at the time when the sum is paid or paid away so long as it is held at some | |
point in the tax year in which the sum is paid or paid away. | 20 |
(4) References in this Chapter to an employee accordingly include a prospective or | |
former employee. | |
(5) This Chapter does not apply to the extent that the sum constitutes earnings | |
from the employment by virtue of any other provision. | |
71 Meaning of paid or put at disposal by reason of the employment | 25 |
(1) If an employer pays a sum in respect of expenses to an employee it is to be | |
treated as paid by reason of the employment unless— | |
(a) the employer is an individual, and | |
(b) the payment is made in the normal course of the employer’s domestic, | |
family or personal relationships. | 30 |
(2) If an employer puts a sum at an employee’s disposal in respect of expenses it | |
is to be treated as put at the employee’s disposal by reason of the employment | |
unless— | |
(a) the employer is an individual, and | |
(b) the sum is put at the employee’s disposal in the normal course of the | 35 |
employer’s domestic, family or personal relationships. | |
72 Sums in respect of expenses treated as earnings | |
(1) If this Chapter applies to a sum, the sum is to be treated as earnings from the | |
employment for the tax year in which it is paid or paid away. | |
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(2) Subsection (1) does not prevent the making of a deduction allowed under any | |
of the provisions listed in subsection (3). | |
(3) The provisions are— | |
section 336 (deductions for expenses: the general rule); | |
section 337 (travel in performance of duties); | 5 |
section 338 (travel for necessary attendance); | |
section 340 (travel between group employments); | |
section 341 (travel at start or finish of overseas employment); | |
section 342 (travel between employments where duties performed | |
abroad); | 10 |
section 343 (deduction for professional membership fees); | |
section 344 (deduction for annual subscriptions); | |
section 346 (deduction for employee liabilities); | |
section 351 (expenses of ministers of religion); | |
section 353 (deductions from earnings charged on remittance). | 15 |
Chapter 4 | |
Taxable benefits: vouchers and credit-tokens | |
Cash vouchers: introduction | |
73 Cash vouchers to which this Chapter applies | |
(1) This Chapter applies to a cash voucher provided for an employee by reason of | 20 |
the employment which is received by the employee. | |
(2) A cash voucher provided for an employee by the employer is to be regarded as | |
provided by reason of the employment unless— | |
(a) the employer is an individual, and | |
(b) the provision is made in the normal course of the employer’s domestic, | 25 |
family or personal relationships. | |
(3) A cash voucher provided for an employee and appropriated to the employee— | |
(a) by attaching it to a card held for the employee, or | |
(b) in any other way, | |
is to be treated for the purposes of this Chapter as having been received by the | 30 |
employee at the time when it is appropriated. | |
74 Provision for, or receipt by, member of employee’s family | |
For the purposes of this Chapter any reference to a cash voucher being | |
provided for or received by an employee includes a reference to it being | |
provided for or received by a member of the employee’s family. | 35 |
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