Income Tax (Earnings and Pensions) Act 2003

Exemptions for particular non-cash vouchers and credit-tokens

268 Exemption of vouchers and tokens for incidental overnight expenses

(1) No liability to income tax arises by virtue of Chapter 4 of Part 3 (taxable benefits: vouchers and credit-tokens) in respect of a non-cash voucher or a credit-token if or to the extent that the voucher or token is used by an employee to obtain goods, services or money if conditions A to C are met.

(2) In the case of goods or services, condition A is that—

(a) obtaining them is incidental to the employee’s absence from the place where the employee normally lives, and

(b) that absence is for a continuous period in relation to which the overnight stay conditions are met (“the qualifying period”).

(3) In the case of money, condition A is that—

(a) it is obtained for the purpose of obtaining goods or services, and

(b) obtaining them is incidental to such an absence during such a period.

(4) Condition B is that an amount would not be deductible under section 362 or 363 (deductions where non-cash voucher or credit-token provided) in respect of the cost of obtaining the goods or services.

(5) Condition C is that the exemption provisions total in respect of the qualifying period does not exceed the permitted amount.

(6) In this section—

• “the overnight stay conditions” has the same meaning as in section 240 (exemption of incidental overnight expenses and benefits) (see section 240(4)), and

• “the exemption provisions total” and “the permitted amount” have the same meaning as in section 241 (incidental overnight expenses and benefits: overall exemption limit) (see section 241(2) and (3)).

269 Exemption where benefits or money obtained in connection with taxable car or van or exempt heavy goods vehicle

(1) No liability to income tax arises by virtue of Chapter 4 of Part 3 (taxable benefits: vouchers and credit-tokens) in respect of a non-cash voucher or a credit-token if or to the extent that the voucher or token is used by the employee or a member of the employee’s family for obtaining—

(a) goods or services in connection with a taxable car or van or an exempt heavy goods vehicle, or

(b) money which is spent on such goods or services.

(2) Subsection (1) applies where the goods in question are fuel for a car, but see section 149(3) (by virtue of which such use of a voucher or token is treated as the provision of the fuel for the purposes of section 149 (benefit of car fuel treated as earnings)).

(3) For the purposes of this section—

(a) “car” and “van” have the meaning given by section 115, and

(b) a car or van is “taxable” if the cash equivalent of the benefit of it is treated as the employee’s earnings for the tax year in which the voucher or token is used under Chapter 6 of Part 3 (taxable benefits: cars, vans and related benefits).

(4) For the purposes of this section—

(a) “heavy goods vehicle” has the same meaning as in section 238 (modest private use of heavy goods vehicles), and

(b) a heavy goods vehicle is “exempt” if it is made available in the tax year to the employee in such circumstances that section 238 applies or would apply if the employee were not in excluded employment.

270 Exemption for small gifts of vouchers and tokens from third parties

(1) No liability to income tax arises by virtue of Chapter 4 of Part 3 (taxable benefits: vouchers and credit-tokens) in respect of a non-cash voucher or a credit-token if conditions A to C are met.

(2) Condition A is that the voucher or token is provided as a gift.

(3) Condition B is that it is only capable of being used to obtain goods.

(4) Condition C is that it meets conditions A to C and E in section 324 (general exemption of small gifts from third parties).