Finance Act 1989

Benefits in kind E+W+S+N.I.

49 Car benefits. E+W+S+N.I.

(1) In Schedule 6 to the Taxes Act 1988 (taxation of directors and others inrespect of cars) for Part I (tables of flat rate cash equivalents) there shallbe substituted—

“Part I E+W+S+N.I. Tables of Flat Rate Cash Equivalents

table A

cars with an original market value up to £19,250 and having a cylinder capacity

Cylinder capacity of car in cubic centimetres	Age of car at end of relevant year of assessment
	Under 4 years	4 years or more
1400 or less	£1,400	£950
More than 1400 but not more than 2000	£1,850	£1,250
More than 2000	£2,950	£1,950

table B

Cars with an original market value up to £19,250 and not having a cylinder capacity

Original market value of car	Age of car at end of relevant year of assessment
	Under 4 years	4 years or more
Less than £6,000	£1,400	£950
£6,000 or more but less than £8,500	£1,850	£1,250
£8,500 or more but not more than £19,250	£2,950	£1,950

table B

Cars with an original market value of more than £19,250

Original market value of car	Age of car at end of relevant year of assessment
	Under 4 years	4 years or more
More than £19,250 but not more than £29,000	£3,850	£2,600
More than £29,000	£6,150	£4,100”

(2) This section shall have effect for the year 1989-90 and subsequent yearsof assessment.

50 Security assets and services. E+W+S+N.I.

(1) For the purposes of this section a security asset is an asset whichimproves personal security, and a security service is a service which improvespersonal security.

(2) In a case where—

(a) a security asset or security service is provided for an employee by reasonof his employment, or is used by an employee, and

(b) the cost is wholly or partly borne by or on behalf of a person (theprovider) other than the employee,

in charging tax under Schedule E on the emoluments from the employmenta deduction shall be allowed of an amount equal to so much of the cost soborne as falls to be included in the emoluments of the employment.

(3) In a case where—

(a) a security asset or security service is provided for or used by anemployee,

(b) expenses in connection with the provision or use are incurred out of theemoluments of the employment, and

(c) the expenses are reimbursed by or on behalf of a person (the provider)other than the employee,

in charging tax under Schedule E on the emoluments from the employmenta deduction shall be allowed of an amount equal to the amount of the expenses.

(4) Subsection (2) or (3) above shall not apply unless the asset or serviceis provided for or used by the employee to meet a threat which—

(a) is a special threat to his personal physical security, and

(b) arises wholly or mainly by virtue of the particular employment concerned.

(5) Subsection (2) or (3) above shall not apply unless the provider has themeeting of that threat as his sole object in wholly or partly bearing the costor reimbursing the expenses (as the case may be).

(6) Subsection (2) or (3) above shall not apply in the case of a serviceunless the benefit resulting to the employee consists wholly or mainly of animprovement of his personal physical security.

(7) Subsection (2) or (3) above shall not apply in the case of an asset unlessthe provider intends the asset to be used solely to improve personal physicalsecurity.

51 Assets used partly for security. E+W+S+N.I.

(1) In a case where—

(a) apart from section 50(7) above, section 50(2) above would apply in thecase of an asset, and

(b) the provider intends the asset to be used partly to improve personalphysical security,

section 50(2) shall nevertheless apply, but only so as to allow adeduction of the appropriate proportion of the amount there mentioned.

(2) For the purposes of subsection (1) above the appropriate proportion of theamount mentioned in section 50(2) above is such proportion of that amount asis attributable to the provider’s intention that the asset be used to improvepersonal physical security.

(3) In a case where—

(a) apart from section 50(7) above, section 50(3) above would apply in thecase of an asset, and

(b) the provider intends the asset to be used partly to improve personalphysical security,

section 50(3) shall nevertheless apply, but only so as to allow adeduction of the appropriate proportion of the amount there mentioned.

(4) For the purposes of subsection (3) above the appropriate proportion of theamount mentioned in section 50(3) above is such proportion of that amount asis attributable to the provider’s intention that the asset be used to improvepersonal physical security.

52 Security: supplementary. E+W+S+N.I.

(1) If the provider intends the asset to be used solely to improve personalphysical security, but there is another use for the asset which is incidentalto improving personal physical security, that other use shall be ignored inconstruing section 50(7) above.

(2) The fact that an asset or service improves the personal physical securityof any member of the employee’s family or household, as well as that of theemployee, shall not prevent section 50(2) or (3) above from applying.

(3) In sections 50 and 51 above and this section—

(a) references to an asset do not include references to a car, a ship or anaircraft,

(b) references to an asset or service do not include references to a dwelling,grounds appurtenant to a dwelling, or living accommodation,

(c) references to an asset include references to equipment and a structure(such as a wall),

(d) references to an employee are to a person who holds an employment, and

(e) references to an employment include references to an office.

(4) For the purposes of sections 50 and 51 above and this section in theirapplication to an asset, it is immaterial whether or not the asset becomesaffixed to land (whether constituting a dwelling or otherwise).

(5) For the purposes of sections 50 and 51 above and this section in theirapplication to an asset, it is immaterial whether or not the employee is orbecomes entitled to the property in the asset or (in the case of a fixture)an estate or interest in the land concerned.

(6) Sections 50 and 51 above and this section apply where expenditure isincurred on or after 6th April 1989 in or towards bearing a cost or inreimbursing expenses (as the case may be).

53 Employees earning £8,500 or more and directors. E+W+S+N.I.

(1) For section 167 of the Taxes Act 1988 (which defines “director’sor higher-paid employment” for the purposes of Chapter II of Part V)there shall be substituted—

“167 Employment to which this Chapter applies.

(1) This Chapter applies—

(a) to employment as a director of a company (but subject to subsection (5)below), and

(b) to employment with emoluments at the rate of £8,500 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, or would but forsection 157(3) come, into charge under this Chapter or section 141, 142, 143or 145, and

(b) without any deduction under section 198, 201 or 332(3).

(3) Where a person is employed in two or more employments by the same employerand either—

(a) the total of the emoluments of those employments (applying this section)is at the rate of £8,500 a year or more, or

(b) this Chapter applies (apart from this subsection) to one or more of thoseemployments,

this Chapter shall apply to all the employments.

(4) All employees of a partnership or body over which an individual or anotherpartnership or body has control are to be treated for the purposes of thissection (but not for any other purpose) as if the employment were anemployment by the individual or by that other partnership or body as the casemay be.

(5) This Chapter shall not apply to a person’s employment by reason only ofits being employment as a director of a company (without prejudice to itsapplication by virtue of subsection (1)(b) or (3) above) if he has no materialinterest 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 ona trade nor do its functions consist wholly or mainly in the holding ofinvestments or other property) or is established for charitable purposes only.”

(2) In consequence of subsection (1) above—

(a) for the heading to Chapter II of Part V of the Taxes Act 1988 there shallbe substituted “EMPLOYEES EARNING £8,500 OR MORE AND DIRECTORS”;

(b) the words “ employment to which this Chapter applies ” shall besubstituted for the words “director’s or higher-paid employment” insections 153(1), 154(1), 157(1), 158(1), 160(1) and (2), 162(1), 163(1) and165(6)(b) of that Act;

(c) for section 160(3) of that Act there shall be substituted—

“(3) Where—

(a) there was outstanding, at any time when a person was in employment towhich this Chapter applies, the whole or part of a loan to him (or a relativeof his) the benefit of which was obtained by reason of his employment, and

(b) that employment has terminated or ceased to be employment to which thisChapter applies,

subsection (2) above applies as if the employment had not terminated or,as the case may be, had not ceased to be employment to which this Chapterapplies.”;

(d) in section 162(5) of that Act, after the words “section 160(2)” thereshall be inserted the words “(and where appropriate section 160(3))”;

(e) for section 162(7) of that Act there shall be substituted—

“(7) If at the time of the event giving rise to a charge by virtue ofsubsection (6) above the employment in question has terminated, thatsubsection shall apply as if it had not.”

(f) the words “ employment to which Chapter II of Part V applies ”shall be substituted for the words from “director’s” to “section167)” in sections 332(2)(c) and 418(3)(a) of that Act;

(g) the words “ employment to which Chapter II of Part V of the principalAct applies ” shall be substituted for the words “director’s or higherpaid employment” in section 15(3)(a) of the M1 TaxesManagement Act 1970.

Annotations:

Annotations are used to give authority for changes and other effects on the legislation you are viewing and to convey editorial information. They appear at the foot of the relevant provision or under the associated heading. Annotations are categorised by annotation type, such as F-notes for textual amendments and I-notes for commencement information (a full list can be found in the Editorial Practice Guide). Each annotation is identified by a sequential reference number. For F-notes, M-notes and X-notes, the number also appears in bold superscript at the relevant location in the text. All annotations contain links to the affecting legislation.

Marginal Citations

M1 1970 c. 9.