Income Tax (Earnings and Pensions) Act 2003 (c. 1)

Part 4 Employment income: exemptions

Chapter 5 Exemptions: recreational benefits

Recreational facilities

261 Exemption of recreational benefits

(1) No liability to income tax arises in respect of the provision to an employee or a member of an employee’s family or household of benefits within subsection (2).

(2) The benefits are—

(a) sporting or other recreational facilities which meet conditions A to C, and

(b) a right or opportunity to make use of such facilities.

This is subject to section 262.

(3) Condition A is that the facilities are available generally to the employees of the employer in question.

(4) Condition B is that they are not available to members of the public generally.

(5) Condition C is that they are used wholly or mainly by persons whose right or opportunity to use them is employment-related (whether or not by reference to the same employer).

(6) A person’s right or opportunity to use facilities is “employment-related” if and only if—

(a) it derives from the person being—

(i) an employee or former employee, or

(ii) a member or former member of the family or household of an employee or former employee,

of a particular employer, and

(b) the facilities are provided so as to be available generally to that employer’s employees.

262 Benefits not exempted by section 261

(1) Section 261 (exemption of recreational benefits) does not apply to the following benefits—

(a) an interest in or the use of any of the following—

(i) a mechanically propelled vehicle,

(ii) holiday or other overnight accommodation, or

(iii) facilities which include, or are provided in association with, a right or opportunity to make use of holiday or overnight accommodation,

(b) facilities provided on domestic premises, or

(c) a right or opportunity to make use of facilities within paragraph (a) or (b).

(2) In this section—

• “domestic premises” means—

  (a)

  premises used wholly or mainly as a private dwelling, or

  (b)

  land or other premises belonging to, or enjoyed with, premises so used, and

• “vehicle” includes a ship, boat or other vessel, an aircraft and a hovercraft.

263 Power to alter benefits to which section 261 applies

The Treasury may by regulations provide that section 261—

(a) does not apply to a benefit specified in the regulations,

(b) applies to a benefit so specified only where such conditions as the regulations specify are met in relation to the terms on which, and the persons to whom, it is provided, or

(c) applies in such cases as are so specified to—

(i) facilities that do not meet the conditions in section 261(3) to (5), or

(ii) a benefit within section 262.