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Income Tax (Earnings and Pensions) Act 2003

Section 377: Costs and expenses in respect of personal security assets and services

1652.This section provides that a deduction is allowed for costs and expenses in respect of personal security assets and services.

1653.The section derives from sections 50 to 52 of FA 1989.

1654.Subsection (1) specifies the circumstances in which a deduction from earnings is allowed. See also Change 101(A) in Annex 1. The deduction is allowed if:

  • there is a special threat to the employer’s personal physical security which arises wholly or mainly because of the employee’s employment;

  • an asset or service which improves personal security is provided for or used by the employee to meet the threat;

  • the employee’s earnings include an amount in respect of the asset or service because some or all of the costs are borne by the provider; and

  • the provider’s sole object in bearing the whole or part of the cost or reimbursing the expenses is meeting the threat.

1655.If the provider of an asset within subsection (1) intends that asset to be used solely for the purpose of improving personal physical security, a deduction equal to the included amount is allowed (subsection (2)). Use incidental to this purpose is ignored (subsection (3)). If the provider of the asset intends it to be used only partly to improve personal physical security, the deduction allowed is only a proportion of the included amount (subsection (4)). In determining whether or not this section applies, certain matters may be disregarded (subsection (5)).

1656.In the case of a service within subsection (1), if the benefit resulting to the employee consists wholly or mainly of an improvement of the employee’s physical security, a deduction equal to the included amount is allowed (subsection (6)).

1657.Subsection (7) provides that the fact that an asset or a service improves the personal physical security of a member of the employee’s family or household, as well as that of an employee, does not prevent a deduction being allowed under this section. In subsection (7) the expression “member of the employees’ family or household” is not defined in the source legislation; but in this Act this expression is covered by the general definitions in section 721(4) and (5). See Note 39 in Annex 2.

1658.Subsection (8)omits the reference to “living accommodation” in section 52(3)(b) of FA 1989 on the basis that this expression is already encompassed by the word “dwelling”.

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