Finance Act 1977

35 Other amendments relating to benefits of employment

(1) For section 69 of the [1976 c. 40.] Finance Act 1976 (employments to be treated as " director's or higher-paid ") the following section shall be substituted—

“69 Employments subject to ss. 60 to 67.

(1) In this Chapter "director's or higher-paid employment" means—

(a) subject to subsection (5) below, employment as a director of a company ; or

(b) employment with emoluments at the rate of £5,000 a year or more.

(2) For this purpose emoluments are to be calculated—

(a) on the basis that they include all such amounts as come into charge under this Chapter or section 33 of the Finance Act 1977 in the case of those in director's or higher-paid employment or under section 68 of this Act or under section 36 or 37 of the Finance (No. 2) Act 1975 (cash or other vouchers); and

(b) without any deduction under section 189, 192 or 194(3) of the Taxes Act (necessary expenses of employment etc.).

(3) But where a person is employed in two or more employments by the same employer and either—

(a) the total of the emoluments of those employments (applying this section) is at the rate of £5,000 a year or more ; or

(b) one or more of those employments is (apart from this subsection) director's or higher-paid,

all the employments are to be treated as director's or higher-paid.

(4) All employees of a partnership or body over which an individual or another partnership or body has control are to be treated for the purposes of this section (but not for any other purpose) as if the employment were an employment by the individual or by that other partnership or body as the case may be.

(5) A person's employment is not director's or higher-paid by reason only of its being employment as a director of a company (without prejudice to its being so under subsection (1)(b) or (3)) if he has no material interest in the company and either—

(a) his employment is as a full-time working director; or

(b) the company is non-profit-making (meaning that neither does it carry on a trade, nor do its functions consist wholly or mainly in the holding of investments or other property) or is established for charitable purposes only.”.

(2) In consequence of sections 33 and 34 above and of this section, the Tax Acts shall be amended as shown in Part I of Schedule 8 to this Act.

(3) Subsections (1) and (2) above have effect for the year 1977-78 and subsequent years of assessment; and, for the year 1978-79 and subsequent years of assessment, " £7,500" shall be substituted for " £5,000 " in subsections (1)(b) and (3)(a) of section 69 of the [1976 c. 40.] Finance Act 1976.

(4) In Schedule 9 to the [1976 c. 40.] Finance Act 1976 (consequential amendments of enactments in connection with revised provisions relating to taxation of directors' benefits etc.), paragraph 15 (substitution of new proviso to section 284(2) of the Taxes Act, about close company distributions) shall be deemed to have been so enacted that in paragraph (b) of the substituted proviso, after the word " annuity " there were inserted the words " lump sum, gratuity or other like benefit to be given ".