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Taxable benefits: the benefits code | |
17 (1) In relation to times before 6th April 2003, references in the benefits code to | |
“employment”, “employed”, “employee” and “employer” are to be read in | |
accordance with this paragraph. | |
(2) In relation to the Chapters of the benefits code listed in section 216(4) | 5 |
(provisions not applicable to lower-paid employments), the references | |
mentioned in sub-paragraph (1) are to be read in accordance with section 66 | |
(meaning of employment and related expressions) but as if in subsection | |
(1)(a) there were substituted “an employment to which Chapter 2 of Part 5 | |
of ICTA applies” for “a taxable employment under Part 2”. | 10 |
(3) In relation to any other Chapters of the benefits code, the references | |
mentioned in sub-paragraph (1) are to be read in accordance with section 66 | |
but as if in subsection (1)(a) there were substituted “an employment the | |
emoluments of which fall to be assessed under Schedule E” for “a taxable | |
employment under Part 2”. | 15 |
(4) Where this paragraph applies, Chapter 11 of Part 3 (exclusion of lower-paid | |
employments from parts of benefits code) does not apply. | |
(5) This paragraph is subject to paragraphs 18(2), 24, 27(3), 29(4) and 31(2) of this | |
Schedule. | |
Taxable benefits: vouchers and credit-tokens | 20 |
18 (1) For the purpose of applying sections 82 to 89 (non-cash vouchers) in relation | |
to times before 6th April 2003, Chapter 4 of Part 3 applies with the following | |
modification. | |
(2) In section 89(1)(c) (reduction for meal vouchers) substitute “an employment | |
which is not an employment within the meaning of section 167(1)(b) of | 25 |
ICTA” for “lower-paid employment within the meaning of Chapter 11 of this | |
Part (see section 217)”. | |
19 (1) This paragraph applies to a notification which, immediately before 6th April | |
2003, was in force under section 144(1) of ICTA (notice of nil liabilities in | |
respect of vouchers or credit-tokens). | 30 |
(2) The notification— | |
(a) is not affected by any repeals made by this Act, but | |
(b) continues in force as if it were a dispensation given under section 96 | |
(dispensations relating to vouchers or credit-tokens), | |
and accordingly, where the notification is revoked under that section for any | 35 |
period before 6th April 2003, subsection (7) or (8) of that section extends to | |
tax years before the tax year 2003-04. | |
20 (1) This paragraph applies if— | |
(a) mileage allowance payments are made to an employee in respect of | |
the use of a vehicle that is not a company vehicle, or | 40 |
(b) mileage allowance relief is available in respect of the use by an | |
employee of a vehicle. | |
(2) Any notification under section 144(1) of ICTA (notice of nil liability in | |
respect of vouchers or credit-tokens) which— | |
(a) was in force immediately before 6th April 2002, and | 45 |
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(b) has effect as a dispensation under section 96 (dispensations relating | |
to vouchers or credit-tokens), | |
does not apply in relation to cash vouchers, non-cash vouchers or credit- | |
tokens provided in respect of expenses incurred in connection with the use | |
of the vehicle by the employee for business travel. | 5 |
(3) In this paragraph “business travel”, “company vehicle” and “mileage | |
allowance payment” have the same meanings as in Chapter 2 of Part 4. | |
Taxable benefits: living accommodation | |
21 (1) Section 107 (special rule for calculating cost of providing accommodation) | |
does not apply if the employee first occupied the living accommodation | 10 |
before 31st March 1983. | |
(2) Nothing in this paragraph affects the operation of section 107 as applied by | |
section 398(2)(b) or 415(2)(b). | |
Taxable benefits: cars, vans and related benefits | |
22 (1) In relation to a capital sum contributed by the employee before 6th April | 15 |
2003, section 132 (cars: capital contributions by employee) applies with the | |
following modifications. | |
(2) In subsection (1)(b) substitute “under sections 168A to 168C of ICTA in | |
determining the price of the car as regards a year” for “in calculating the cash | |
equivalent of the benefit of the car”. | 20 |
(3) In subsection (2)— | |
(a) omit paragraph (a), and | |
(b) in paragraph (b) substitute “the tax years after the tax year in which | |
the contribution was made which are” for “subsequent”. | |
23 (1) In relation to a capital sum contributed by the employee before 6th April | 25 |
2003, section 147 (classic cars: 15 years of age or more) applies with the | |
following modifications. | |
(2) In subsection (5)(b) substitute “under section 168F(3) of ICTA in determining | |
the price of the car as regards a year” for “in determining the market value | |
of the car”. | 30 |
(3) In subsection (6)— | |
(a) omit paragraph (a), and | |
(b) in paragraph (b) substitute “the tax years after the tax year in which | |
the contribution was made which are” for “subsequent”. | |
24 (1) This paragraph applies to the operation of section 156(4) (meaning of | 35 |
“shared van”: where van available to only one employee) in relation to times | |
before 6th April 2003. | |
(2) The following references are to be read in accordance with section 66 | |
(meaning of “employment” and related expressions) as modified by sub- | |
paragraph (3)— | 40 |
(a) the reference to an “employee” in section 156(4), and | |
(b) the references to “employee”, “employment” and “employer” in | |
sections 116 and 117 (meaning of van is available to employee) as | |
applied for the purposes of section 156(4). | |
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(3) In section 66(1)(a) substitute “an employment the emoluments of which fall | |
to be assessed under Schedule E” for “a taxable employment under Part 2”. | |
Taxable benefits: loans | |
25 (1) Chapter 7 of Part 3 applies to a loan made at any time, including one made | |
before 29th July 1976 (the date on which FA 1976 was passed). | 5 |
(2) But section 188 (loan released or written off: amount treated as earnings) | |
does not apply to benefits received in pursuance of arrangements made at | |
any time with a view to protecting the holder of shares acquired before 6th | |
April 1976 from a fall in their market value. | |
26 (1) This paragraph relates to the operation of section 183 (alternative method of | 10 |
calculation) in relation to section 177(2) (exceptions for loans at fixed rate of | |
interest) in the case of a loan made before 6th April 2003. | |
(2) Where section 183 applies, then for the purpose of calculating under section | |
177(2) the amount of interest that would have been payable on the loan at | |
the official rate of interest for the year in which the loan was made, in step 3 | 15 |
in section 183(3) for “the number of days in the tax year” substitute “365”. | |
27 (1) Subject to paragraph 25(2), where a loan is made before 6th April 2003, | |
section 188 (loan released or written off: amount treated as earnings) applies | |
with the following modifications. | |
(2) References to the employment in relation to which a loan is an employment- | 20 |
related loan are to be read, in relation to times before 6th April 2003, as | |
references to the employment referred to in section 174 (employment- | |
related loans) as modified by paragraph 17. | |
(3) In relation to times before 6th April 2003— | |
(a) in subsection (2)(c), substitute “an employment to which Chapter 2 | 25 |
of Part 5 of ICTA applies” for “not an excluded employment”, and | |
(b) in subsection (3)(a), substitute “an employment to which Chapter 2 | |
of Part 5 of ICTA does not apply” for “excluded employment”. | |
Taxable benefits: notional loans in respect of acquisitions of shares | |
28 Chapter 8 of Part 3 does not apply in relation to acquisitions on or before 6th | 30 |
April 1976. | |
29 (1) This paragraph relates to the operation of Chapter 8 of Part 3 in relation to | |
an acquisition made before 6th April 2003. | |
(2) If— | |
(a) the acquisition gave rise to a notional loan under section 162(1) of | 35 |
ICTA, and | |
(b) the notional loan has not terminated under section 162(4) of ICTA | |
before 6th April 2003, | |
the condition in section 193(1) (notional loan where acquisition for less than | |
market value) is taken to be met and section 193(3) and (4) apply | 40 |
accordingly. | |
(3) In such a case, the amount initially outstanding of the notional loan for the | |
purposes of Chapter 8 of Part 3 is taken to be the amount initially | |
outstanding calculated under section 162 of ICTA in relation to the tax year | |
2002-03. | 45 |
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(4) In such a case, section 195(3)(c) (discharge of notional loan: amount treated | |
as earnings) applies, in relation to times before 6th April 2003, with the | |
substitution of “an employment to which Chapter 2 of Part 5 of ICTA | |
applies” for “not an excluded employment”. | |
Taxable benefits: disposals of shares for more than market value | 5 |
30 Chapter 9 of Part 3 does not apply in relation to shares or an interest in | |
shares acquired on or before 6th April 1976. | |
31 (1) This paragraph relates to the operation of section 199 (disposal for more than | |
market value: amount treated as earnings) in relation to an acquisition made | |
before 6th April 2003. | 10 |
(2) Subsection (4)(b) applies, in relation to times before 6th April 2003, with the | |
substitution of “an employment to which Chapter 2 of Part 5 of ICTA | |
applies” for “not an excluded employment”. | |
Taxable benefits: residual liability to charge | |
32 (1) This paragraph applies in relation to Chapter 10 of Part 3. | 15 |
(2) In section 206, the references in subsection (4) and step 2 in subsection (5) to | |
the cost of a benefit determined under section 205 are to be read as including | |
a reference to the cost of a benefit determined under section 156(5) of ICTA. | |
(3) Sections 212, 213 and 215 do not have effect in relation to any payment if— | |
(a) it is made in respect of a scholarship awarded before 15th March | 20 |
1983, | |
(b) the first payment in respect of the scholarship was made before 6th | |
April 1984, and | |
(c) in relation to payments made after 5th April 1989, the person holding | |
the scholarship (“the scholar”) is receiving full-time instruction at the | 25 |
university, college, school or other educational establishment at | |
which the scholar was receiving such instruction on— | |
(i) 15th March 1983, in a case where the first payment in respect | |
of the scholarship was made before that date, or | |
(ii) the date on which the first such payment was made, in any | 30 |
other case. | |
(4) For the purposes of sub-paragraph (3)(c), a payment made before 6th April | |
1989 in respect of any period beginning on or after that date is treated as | |
made at the beginning of that period. | |
Part 4 | 35 |
Employment income: exemptions | |
Incidental overnight expenses and benefits | |
33 In determining whether section 240(1) or (2) or 268 applies— | |
(a) in the case of a period of absence which began before 6th April 2003 | |
and ends on or after that date, or | 40 |
(b) in the case of a period of absence which begins on or after that date | |
and incidentally to which goods, services or money are obtained | |
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(b) using a non-cash voucher in relation to which section 141(6C) of | |
ICTA applies, | |
the question whether for the purposes of section 241 the exemption | |
provisions total exceeds the permitted amount is to be determined as if this | |
Act had applied at any relevant time before that date. | 5 |
34 In determining— | |
(a) whether section 141(6C) and (6D), 142(3C) and (3D), 155(1B) and (1C) | |
or section 200A of ICTA applies in the case of a period of absence | |
which began before 6th April 2003 and ends on or after that date, or | |
(b) whether section 141(6C) and (6D) applies in the case of a period of | 10 |
absence which begins on or after that date, | |
the question whether the authorised maximum (as defined in section | |
200A(4) of ICTA) is exceeded in relation to the absence is to be determined | |
as if in section 200A(5) after the words “exceeded by” there were inserted the | |
words “the aggregate of the exemption provisions total in respect of the | 15 |
period (as defined in section 241 of ITEPA 2003) and”. | |
Removal benefits and expenses | |
35 (1) Section 287 (limit on exemption for removal benefits and expenses) applies | |
with the modification in sub-paragraph (2) where— | |
(a) a benefit is provided on or after 6th April 2003 in connection with a | 20 |
change of an employee’s residence, or | |
(b) expenses are incurred on or after that day in connection with such a | |
change, | |
and any such benefits have been provided or expenses incurred before that | |
date in connection with that change. | 25 |
(2) In subsection (2) before paragraph (a) insert— | |
“(aa) the total value to the employee immediately before 6th | |
April 2003, as defined in paragraph 24(2) of Schedule 11A to | |
ICTA,”. | |
36 A direction under paragraph 6(2) of Schedule 11A to ICTA (directions as to | 30 |
meaning of “the relevant day”) by virtue of which a day on or after 6th April | |
2003 was directed to be the relevant day in relation to a change of | |
residence— | |
(a) is not affected by any repeals made by this Act, but | |
(b) continues in force as respects any benefit provided or expenses | 35 |
incurred on or after that date as if it were a direction given under | |
section 274(2) (directions as to the limitation day), directing that day | |
to be the limitation day. | |
Retraining courses | |
37 (1) The repeal of sections 588(5)(a) and 589(3) and (4) of ICTA does not affect— | 40 |
(a) the operation of section 588(5) of ICTA by virtue of paragraph (a) of | |
that provision where liability for a tax year before 2003-04 is | |
determined, | |
(b) the operation of section 588(5) of ICTA by virtue of paragraph (b) of | |
that provision where liability is determined on the assumption that | 45 |
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(b) the person undertaking the course fell within section 588(1) of ICTA | |
in such a tax year, or | |
(c) the operation of section 588(6) and (7) of ICTA as they apply by | |
virtue of sub-paragraph (2). | |
(2) In any case where there has been such a determination as is mentioned in | 5 |
sub-paragraph (1)(a) or (b), section 588(6) and (7) apply as if section 588(6) | |
referred to a failure to comply with any provision of section 589(3) or (4) of | |
ICTA instead of a failure to meet such a condition as is mentioned in section | |
312(1)(b)(i) or (ii) of this Act. | |
Suggestion awards | 10 |
38 (1) This paragraph applies for the purpose of determining the extent, if any, to | |
which section 321(2) (exemption of suggestion awards) applies in respect of | |
a financial benefit award for a suggestion (“the later award”) in a case where | |
such an award (“the earlier award”) has been made for the same suggestion | |
on a previous occasion or occasions before the tax year 2003-04. | 15 |
(2) For the purposes of the application of section 322(3) in relation to the later | |
award, “the residue of the suggestion maximum” means the suggestion | |
maximum, as defined in section 322(4), less the aggregate of— | |
(a) the total of the amounts exempted from income tax under section 321 | |
in respect of financial benefit awards for the same suggestion made | 20 |
on previous occasions, and | |
(b) the total of the earlier awards. | |
Part 5 | |
Employment income: deductions | |
Earnings charged on remittance | 25 |
39 In relation to expenses incurred before the tax year 2003-04, section 353 | |
(deductions from earnings charged on remittance) applies as if the condition | |
in subsection (3) of that section were that the expenses would have been | |
deductible under section 193, 194, 195 or 198(1) of ICTA from emoluments | |
of the office or employment if those emoluments had been chargeable under | 30 |
Case I of Schedule E for the tax year in which the expenses were incurred. | |
Non-domiciled employee’s travel costs and expenses: “qualifying arrival date” | |
40 In relation to any time before 6th April 2003, section 375 (meaning of | |
“qualifying arrival date”) has effect as if the references in subsections (1)(a) | |
and (4) to the person receiving earnings for duties performed in the United | 35 |
Kingdom included a reference to the person receiving emoluments for such | |
duties. | |
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Part 6 | |
Employment income: income which is not earnings or share-related | |
Benefits from non-approved pension schemes | |
41 (1) Chapter 2 of Part 6 (benefits from non-approved pension schemes) applies | |
with the following modifications in relation to a benefit provided under a | 5 |
non-approved retirement benefits scheme which— | |
(a) was entered into before 1 December 1993, and | |
(b) has not been varied on or after that day with a view to the provision | |
of the benefit. | |
(2) Section 393(2) does not apply. | 10 |
(3) Section 394(5) does not apply. | |
(4) For sections 395, 396 and 397 substitute— | |
“394A Pre-December 1993 schemes: chargeability of certain lump sums | |
(1) Section 394 does not apply to a lump sum to the extent that the lump | |
sum is attributable to the payment of a sum— | 15 |
(a) which is deemed to be the income of a person by virtue of | |
section 595(1) of ICTA and in respect of which that person has | |
been assessed to tax, or | |
(b) which counted as the employment income of an employee by | |
virtue of section 386(1) of this Act. | 20 |
(2) For the purposes of subsection (1) it must be assumed that, unless the | |
contrary is shown, the provision of a lump sum is not attributable to | |
the payment of such a sum as is mentioned in that subsection. | |
394B Pre-December 1993 schemes: relationship between this Chapter and | |
Part 2 | 25 |
(1) This section applies if, apart from this section, the provision of a | |
benefit to which this Chapter applies would give rise to two amounts | |
(“A” and “B”)— | |
(a) A being an amount of general earnings from an employment | |
(see section 7), and | 30 |
(b) B being an amount which is to count as employment income | |
of an individual by virtue of section 394(1). | |
(2) In such a case— | |
(a) A constitutes general earnings from the employment, and | |
(b) the amount, if any, by which B exceeds A is to count as | 35 |
employment income of the individual by virtue of section | |
394(1).” | |
Payments and benefits on termination of employment etc. | |
42 Section 403 (charge on payment or other benefit) does not apply in relation | |
to payments or other benefits received on or after 6th April 2003 that were | 40 |
brought into charge to tax before 6th April 1998. | |
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