Income Tax (Earnings and Pensions) Act 2003

Benefit of non-cash voucher treated as earnings

87 Benefit of non-cash voucher treated as earnings

(1) The cash equivalent of the benefit of a non-cash voucher to which this Chapter applies is to be treated as earnings from the employment for the tax year in which the voucher is received by the employee.

(2) The cash equivalent is the difference between—

(a) the cost of provision, and

(b) any part of that cost made good by the employee to the person incurring it.

(3) In this Chapter the “cost of provision” means, in relation to a non-cash voucher, the expense incurred in or in connection with the provision of—

(a) the voucher, and

(b) the money, goods or services for which it is capable of being exchanged,

by the person at whose cost they are provided.

(4) In the case of a transport voucher, the reference in subsection (3)(b) to the services for which the voucher is capable of being exchanged is to the passenger transport services which may be obtained by using it.

(5) If a person incurs expense in or in connection with the provision of non-cash vouchers for two or more employees as members of a group or class, the expense incurred in respect of one of them is to be such part of that expense as is just and reasonable.

(6) This section is subject to section 89 (reduction for meal vouchers).

88 Year in which earnings treated as received

(1) In the case of a non-cash voucher other than a cheque voucher, the amount treated as earnings under section 87 is to be treated as received—

(a) in the tax year in which the cost of provision is incurred, or

(b) if later, in the tax year in which the voucher is received by the employee.

(2) In the case of a cheque voucher, the amount treated as earnings under section 87 is to be treated as received in the tax year in which the voucher is handed over in exchange for money, goods or services.

(3) Where a cheque voucher is posted it is to be treated as handed over at the time of posting.

89 Reduction for meal vouchers

(1) This section applies where—

(a) the non-cash voucher is a meal voucher,

(b) it is provided for an employee for use on a working day, and

(c) meal vouchers are made available to all employees (if any) employed by the same employer in lower-paid employment within the meaning of Chapter 11 of this Part (see section 217).

(2) The total of the cash equivalents of the benefit of any meal vouchers so provided is to be reduced by 15p for each working day for which the vouchers are provided.

(3) In this section—

• “meal voucher” means a non-cash voucher which—

  (a)

  can only be used to obtain meals,

  (b)

  is not transferable, and

  (c)

  is not of the kind in respect of which no liability to income tax arises under section 266(3)(e) (subsidised meals), and

• “working day” means a day on which the employee is at work.

(4) Section 83 (references to provision for an employee include provision for a member of the employee’s family) does not apply to subsection (1)(b).