Income and Corporation Taxes Act 1988

Payments on retirement, sick pay etc. U.K.

[F1 148 Payments and other benefits in connection with termination of employment, etc. U.K.

(1) Payments and other benefits not otherwise chargeable to tax which are received in connection with—

(a) the termination of a person’s employment, or

(b) any change in the duties of or emoluments from a person’s employment,

are chargeable to tax under this section if and to the extent that their amount exceeds £30,000.

(2) For the purposes of this section a “benefit” includes anything which, if received for performance of the duties of the employment—

(a) would be an emolument of the employment, or

(b) would be chargeable to tax as an emolument of the employment,

or which would be such an emolument, or so chargeable, apart from any exemption.

(3) An amount chargeable to tax under this section is income chargeable under Schedule E for the year of assessment in which the payment or other benefit is received.

The right to receive the payments or other benefits is not itself regarded as a benefit for this purpose.

(4) For the purposes of this section—

(a) a cash benefit is treated as received—

(i) when payment is made of or on account of the benefit, or

(ii) when the recipient becomes entitled to require payment of or on account of the benefit; and

(b) a non-cash benefit is treated as received when it is used or enjoyed.

(5) This section applies—

(a) whether the payment or other benefit is provided by the employer or former employer or by another person, and

(b) whether or not the payment or other benefit is provided in pursuance of a legal obligation.

(6) This section has effect subject to Schedule 11, which contains provisions extending, restricting and otherwise supplementing the provisions of this section.

(7) In this section and that Schedule “employment” includes an office and related expressions have a corresponding meaning.]

Textual Amendments

F1 S. 148 substituted (with application in accordance with s. 58(4) of the amending Act) by Finance Act 1998 (c. 36), s. 58(1)

Modifications etc. (not altering text)

C1 S. 148 restricted by Finance Act 1995 (c. 4), s. 92(10) (as substituted (with application in accordance with s. 58(4) of the amending Act) by Finance Act 1998 (c. 36), Sch. 9 para. 5)

149 Sick pay. U.K.

M1 (1) Where a person holding an employment is absent from work for any period by reason of sickness or disability, any sums which—

(a) are paid to, or to the order or for the benefit of, that person (or a member of his family or household) in respect of any such absence from work; and

(b) are, by reason of his employment, paid as a result of any arrangements entered into by his employer,

shall be chargeable to income tax under Schedule E as emoluments of the employmentfor that periodF2 if, apart from this section, they would not be so chargeablefor that or any other periodF2 .

(2) Where the funds for making payments under any arrangements are attributable partly to contributions made by the employer and partly to contributions made by the persons employed by him, subsection (1) above shall apply only to such part of the sums paid as a result of the arrangements as it is just and reasonable to regard as attributable to the employer’s contributions.

(3) In this section “employment” means an office or employment the emoluments of which fall to be assessed under Schedule E and related expressions shall be construed accordingly; and the reference to a person’s family or household is to his spouse, his sons and daughters and their spouses, his parents and his dependants.

Textual Amendments

F2 Words repealed by 1989 ss.42(3), 187and Sch.17 Part IVfor 1989-90and subsequent years.

Marginal Citations

M1 Source—1981 s.30(1), (2), (4)

150 Job release scheme allowances, maternity pay and statutory sick pay. U.K.

The following payments shall be charged to income tax under Schedule E by virtue of this section if they would not otherwise be, that is to say—

(a) M2 allowances paid under a scheme of the kind described in the M3 Job Release Act 1977, being a scheme which provides for the payment of allowances for periods beginning earlier than one year before the date on which the recipient attains pensionable age, as defined in that Act;

(b) F3 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

(c) payments of statutory sick pay within the meaning of section 1 of the M4 Social Security and Housing Benefits Act 1982 or, in Northern Ireland, Article 3 of the M5 Social Security (Northern Ireland) Order 1982; and

[F4 (d) payments of statutory maternity pay under Part V of the M6 Social Security Act 1986 or, in Northern Ireland, under Part VI of the M7 Social Security (Northern Ireland) Order 1986].

Textual Amendments

F3 S. 150(b) repealed (22.8.1996) by Employment Rights Act 1996 c. 18, ss. 192-195, 242, 243, Sch. 3 Pt. 1

F4 Social Security Act 1986 (c.50) s.86and Sch.10 para.71.

Marginal Citations

M2 Source—1970 s.219A; 1982 s.31(1)

M3 1977 c. 8.

M4 1982 c. 24.

M5 S.I. 1982/1084 (N.I. 16).

M6 1986 c. 50.

M7 S.I. 1986/1888 (N.I. 18).

151 Income support etc. U.K.

M8 (1) Subject to the following provisions of this section, payments to any person of income support under the Social Security Act 1986 in respect of any period shall be charged to income tax under Schedule E if during that period—

(a) his right to income support is subject to the condition specified in section 20(3)(d)(i) of that Act (availability for employment); or

(b) he is one of a married or unmarried couple and section 23 of that Act (trade disputes) applies to him but not to the other person;

(2) M9 In this section “married couple” and “unmarried couple” have the same meaning as in Part II of the Social Security Act 1986.

(3) M10 Where the amount of income support paid to any person in respect of any week or part of a week exceeds the taxable maximum for that period as defined below, the excess shall not be taxable.

(4) Where payments of unemployment benefit and payments of income support are made to any person in respect of the same week or part of a week, the amount taxable in respect of that period in respect of those payments shall not exceed the taxable maximum for that period within the meaning of subsection (3) above.

(5) M11 For the purposes of subsections (3) and (4) above, the taxable maximum in respect of a week shall be determined in accordance with subsections (6) to (8) below and the taxable maximum in respect of part of a week shall be equal to one-sixth of the taxable maximum in respect of a week multiplied by the number of days in the part.

(6) Where the income support is paid to one of a married or unmarried couple in a case not falling within subsection (1)(b) above, the taxable maximum in respect of a week shall be equal to the aggregate of—

(a) the weekly rate specified for the week in question in relation to unemployment benefit in paragraph 1 of Part I of Schedule 4 to the M12 Social Security Act 1975; and

(b) the increase for an adult dependant specified for that week in paragraph 1(a) of Part IV of that Schedule.

(7) Where the income support is paid to one of a married or unmarried couple in a case falling within subsection (1)(b) above, the taxable maximum in respect of a week shall—

(a) if the applicable amount (within the meaning of Part II of the Social Security Act 1986) consists only of an amount in respect of them, be equal to one half of that amount; and

(b) if the applicable amount includes other amounts, be equal to one half of the portion of it which is included in respect of them.

(8) Where the income support is paid to a person who is not one of a married or unmarried couple, the taxable maximum in respect of a week shall be equal to the weekly rate referred to in subsection (6)(a) above.

(9) In its application to Northern Ireland this section shall have effect as if—

(a) for the references to the Social Security Act 1986, to Part II of that Act and to sections 20(3)(d)(i) and 23 of that Act there were substituted respectively references to the Social Security (Northern Ireland) Order 1986, Part III of that Order and Articles 21(3)(d)(i) and 24 of that Order; and

(b) for the references to paragraph 1 of Part 1 of Schedule 4 to the Social Security Act 1975 and paragraph 1(a) of Part IV of that Schedule there were substituted respectively references to paragraph 1 of Part I of Schedule 4 to the Social Security (Northern Ireland) Act 1975 and paragraph 1(a) of Part IV of that Schedule.

Modifications etc. (not altering text)

C2 See 1989 s.41—tax charged on amount accruing (1989-90and subsequent years of assessment).

Marginal Citations

M8 Source—1987 s.29(2)

M9 Source—1987 s.29(2), Sch.3 1(2)

M10 Source—1987 s.29(3), (4)

M11 Source—1987 Sch.3 1(1), 2-4

M12 1975 c. 14.

[F5 151A Jobseeker’s allowance. U.K.

(1) Subject to the following provisions of this section, payments to any person of a jobseeker’s allowance in respect of any period shall be charged to income tax under Schedule E.

(2) Where the amount of a jobseeker’s allowance paid to any person in respect of any week or part of a week exceeds the taxable maximum for that period as defined below, the excess shall not be taxable.

(3) For the purposes of subsection (2) above, the taxable maximum in respect of a week shall be determined in accordance with subsections (4) to (8) below and the taxable maximum in respect of part of a week shall be equal to one-seventh of the taxable maximum in respect of a week multiplied by the number of days in the part.

(4) Where an income-based jobseeker’s allowance is paid to one of a married or unmarried couple, in a case which does not fall within subsection (8) below, the taxable maximum in respect of a week shall be equal to the portion of the applicable amount which is included in respect of them for that week.

(5) Where a contribution-based jobseeker’s allowance is paid to a person (“the claimant") who is a member of a married or unmarried couple, the taxable maximum in respect of a week shall be equal to the portion of the applicable amount which would be included in respect of them if an income-based jobseeker’s allowance was payable to the claimant for that week.

(6) Where an income-based jobseeker’s allowance is paid to a person who is not a member of a married or unmarried couple, the taxable maximum in respect of a week shall be equal to the age-related amount which would be applicable to him if a contribution-based jobseeker’s allowance was payable to him for that week.

(7) Where a contribution-based jobseeker’s allowance is paid to a person who is not a member of a married or unmarried couple, the taxable maximum in respect of a week shall be equal to the age-related amount which is applicable to him for that week.

(8) Where an income-based jobseeker’s allowance is paid to a person (“the claimant”) who is a member of a married or unmarried couple, the other member of which is prevented by section 14 of the Jobseekers Act 1995 (trade disputes) or any corresponding enactment in Northern Ireland from being entitled to a jobseeker’s allowance, the taxable maximum in respect of a week shall be equal to half the portion of the applicable amount which is included in respect of them for that week.

(9) In this section—

• “age-related amount” and “applicable amount” mean the amounts determined as such in accordance with regulations made under section 4 of the Jobseekers Act 1995 or, for Northern Ireland, regulations made under any corresponding enactment in Northern Ireland; and

• “contribution-based jobseeker’s allowance”, “income-based jobseeker’s allowance”, “married couple” and “unmarried couple” have the same meanings as in the Jobseekers Act 1995 or, for Northern Ireland, the same meanings as in any corresponding enactment in Northern Ireland.]

Textual Amendments

F5 S. 151A inserted (2.9.1996) by Jobseekers Act 1995 (c. 18), s. 41(2)(4), Sch. 2 para. 12; S.I. 1996/2208, art. 2(a)

152 Notification of amount taxable under section 151. U.K.

M13 (1) A benefit officer may by notice notify a person who is taxable in respect of any unemployment benefit [F6 ,Jobseeker’s allowance] or income support of the amount on which he is taxable and any such notification shall state the date on which it is issued and shall inform the person to whom it is given that he may object to the notification by notice given within 60 days after the date of issue of the notification.

(2) Where—

(a) no objection is made to a notification of an amount under subsection (1) above within the period specified in that subsection (or such further period as may be allowed by virtue of subsection (5) below); or

(b) an objection is made but is withdrawn by the objector by notice,

that amount shall not be questioned in any appeal against any assessment in respect of income including that amount.

(3) Where—

(a) an objection is made to a notification of an amount under subsection (1) above within the period specified in that subsection (or such further period as may be allowed by virtue of subsection (5) below), and

(b) the benefit officer and the objector come to an agreement that the amount notified should be varied in a particular manner, and

(c) the officer confirms the agreement to vary in writing,

then, subject to subsection (4) below, that amount as so varied shall not be questioned in any appeal against any assessment in respect of income including that amount.

(4) Subsection (3) above shall not apply if, within 60 days from the date when the agreement was come to, the objector gives notice to the benefit officer that he wishes to repudiate or resile from the agreement.

(5) An objection to a notification may be made later than 60 days after the date of the issue of the notification if, on an application for the purpose—

(a) a benefit officer is satisfied that there was a reasonable excuse for not objecting within that time, and

(b) the objection was made thereafter without unreasonable delay, and

(c) the officer gives consent in writing;

and if the officer is not so satisfied he shall refer the application for determination—

(i) by the General Commissioners for the division in which the objector ordinarily resides or,

(ii) in a case where an appeal has been made against an assessment in respect of income including the amount in question, the General Commissioners or the Special Commissioners having jurisdiction in that appeal.

(6) Where a benefit officer has notified an amount to a person under subsection (1) above, he may by another notice notify the person of an alteration in the amount previously notified and, if he does so, the original notification shall be cancelled and this section shall apply to such a subsequent notification as it applies to the original notification.

(7) In this section “benefit officer” means the appropriate officer, in Great Britain, of the Department of Employment or of the Department of Health and Social Security, as the case may be, or, in Northern Ireland, of the Department of Health and Social Services.

Textual Amendments

F6 Words in s. 152(1) inserted (7.10.1996) by Jobseekers Act 1995 (c. 18), s. 41(2)(4), Sch. 2 para. 13; S.I. 1996/2208, art. 2(b)

Marginal Citations

M13 Source—1981 s.28; 1987 Sch.3 6