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

Part 5 U.K. Employment income: deductions allowed from earnings

Chapter 3 U.K. Deductions from benefits code earnings

Introduction U.K.

361 Scope of this Chapter: cost of benefits deductible as if paid by employee U.K.

A deduction from a person’s earnings is allowed under the following provisions of this Chapter where—

(a) the earnings include an amount treated as earnings under—

(i) Chapter 4 of Part 3 (taxable benefits: vouchers and credit-tokens),

(ii) Chapter 5 of Part 3 (taxable benefits: living accommodation), or

(iii) Chapter 10 of Part 3 (taxable benefits: residual liability to charge), and

(b) an amount in respect of the benefit in question would be deductible under Chapter 2 or 5 of this Part if the person had incurred and paid it.

Deductions where amounts treated as earnings under the benefits code U.K.

362 Deductions where non-cash voucher provided U.K.

(1) A deduction from earnings is allowed if—

(a) the earnings include an amount treated as earnings under section [F1 87(1) or 87A(1) (amount in respect] of benefit of non-cash voucher treated as earnings),

(b) the voucher is exchanged for goods or services (whether in the tax year or a later year), and

(c) had the employee incurred and paid the cost of the goods or services in the tax year, the whole or part of the amount paid would have been deductible from the earnings under Chapter 2 or 5 of this Part.

(2) The deduction is equal to the lesser of—

(a) the amount treated as earnings, and

(b) the amount that would have been so deductible.

Textual Amendments

F1 Words in s. 362(1)(a) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 54

363 Deductions where credit-token provided U.K.

(1) A deduction from earnings is allowed if—

(a) the earnings include an amount treated as earnings under section [F2 94(1) or 94A(1) (amount in respect] of benefit of credit-token treated as earnings), and

(b) had the employee incurred and paid the cost of the goods or services obtained by using the token, the whole or part of the amount paid would have been deductible from the earnings under Chapter 2 or 5 of this Part.

(2) The deduction is equal to the lesser of—

(a) the amount treated as earnings, and

(b) the amount that would have been so deductible.

Textual Amendments

F2 Words in s. 363(1)(a) substituted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 56

364 Deductions where living accommodation provided U.K.

(1) A deduction from earnings is allowed if—

(a) the earnings include an amount treated as earnings under Chapter 5 of Part 3 (taxable benefits: living accommodation), and

(b) had the employee incurred and paid an amount equal to that amount for the accommodation in the tax year, the whole or part of the amount paid would have been deductible under Chapter 2 or 5 of this Part.

(2) The deduction is equal to the amount that would have been so deductible.

365 Deductions where [F3 certain employment-related benefits] provided U.K.

(1) A deduction from earnings is allowed if—

(a) the earnings include an amount treated as earnings under Chapter 10 of Part 3 (taxable benefits: residual liability to charge) in respect of a benefit, F4 ...

[F5 (aa) the cost of the benefit was determined under section 204 or 206, and ]

(b) had the employee incurred and paid the cost of the benefit, the whole or part of the amount paid would have been deductible under Chapter 2 or 5 of this Part.

(2) The deduction is equal to the amount that would have been so deductible.

(3) For the purposes of this section, the cost of the benefit is determined in accordance with [F6 section 204 or 206] .

Textual Amendments

F3 Words in s. 365 heading substituted (with effect in accordance with s. 8(5) of the amending Act) by Finance Act 2017 (c. 10), s. 8(4)(c)

F4 Word in s. 365(1)(a) omitted (with effect in accordance with s. 8(5) of the amending Act) by virtue of Finance Act 2017 (c. 10), s. 8(4)(a)(i)

F5 S. 365(1)(aa) inserted (with effect in accordance with s. 8(5) of the amending Act) by Finance Act 2017 (c. 10), s. 8(4)(a)(ii)

F6 Words in s. 365(3) substituted (with effect in accordance with s. 8(5) of the amending Act) by Finance Act 2017 (c. 10), s. 8(4)(b)