Part I Contributions
Preliminary
4 Payments treated as remuneration and earnings.
(1)
For the purposes of section 3 above there shall be treated as remuneration derived from employed earner’s employment—
(a)
any sum paid to or for the benefit of a person in satisfaction (whether in whole or in part) of any entitlement of that person to—
(i)
statutory sick pay; or
(ii)
statutory maternity pay; F1or
F2(iii)
statutory paternity pay; or
(iv)
statutory adoption pay; or
(vi)
statutory parental bereavement pay; and
(b)
any sickness payment made—
(i)
to or for the benefit of the employed earner; and
(ii)
in accordance with arrangements under which the person who is the secondary contributor in relation to the employment concerned has made, or remains liable to make, payments towards the provision of that sickness payment.
(2)
Where the funds for making sickness payments under arrangements of the kind mentioned in paragraph (b) of subsection (1) above are attributable in part to contributions to those funds made by the employed earner, regulations may make provision for disregarding, for the purposes of that subsection, the prescribed part of any sum paid as a result of the arrangements.
(3)
For the purposes of subsections (1) and (2) above “sickness payment” means any payment made in respect of absence from work due to incapacity for work F5. . ..
F6(4)
For the purposes of section 3 above there shall be treated as remuneration derived from an employed earner’s employment—
F7(a)
the amount of any gain calculated under section 479 F8of ITEPA 2003 in respect of which an amount counts as employment income of the earner under section 476 of that Act (charge on acquisition of securities pursuant to option etc), reduced by any amounts deducted under section 480(1) to (6) of that Act in arriving at the amount counting as such employment income;
(b)
any sum paid (or treated as paid) to or for the benefit of the earner which is chargeable to tax by virtue of F9section 225 or 226 of ITEPA 2003 (taxation of consideration for certain restrictive undertakings).
(5)
For the purposes of section 3 above regulations may make provision for treating as remuneration derived from an employed earner’s employment any payment made by a body corporate to or for the benefit of any of its directors where that payment would, when made, not be earnings for the purposes of this Act.
F10(6)
Regulations may make provision for the purposes of this Part—
(a)
for treating any amount on which an employed earner is chargeable to income tax under F11the employment income Parts of ITEPA 2003 as remuneration derived from the earner’s employment; and
(b)
for treating any amount which in accordance with regulations under paragraph (a) above constitutes remuneration as an amount of remuneration paid, at such time as may be determined in accordance with the regulations, to or for the benefit of the earner in respect of his employment.
F12(6A)
In any case where—
(a)
a benefit of a kind mentioned in section 308 or 308A of ITEPA 2003 (contributions to pensions schemes) is provided to or for the benefit of an employed earner pursuant to optional remuneration arrangements, and
(b)
the employed earner would be chargeable to income tax in respect of benefit if section 228A(5) of that Act had effect with the omission of paragraphs (f) and (g) (which refer to sections 308 and 308A),
regulations may make provision for the purposes of this Part for treating the amount foregone in relation to the benefit as remuneration derived from the earner’s employment.
(6B)
Regulations made under subsection (6A) must make provision for amounts not exceeding the contributions limit for a tax year not to be so treated.
(6C)
The contributions limit is the amount specified by regulations made under subsection (6A) as the contributions limit for the whole of a tax year; but—
(a)
the regulations may make other provision about that limit, including provision prescribing an equivalent of that limit for earners paid weekly or at other intervals; and
(b)
if an equivalent is prescribed, the regulations may prescribe an amount which exceeds by not more than £1 the amount which is the arithmetical equivalent of that limit.
(6D)
Regulations made under subsection (6A)—
(a)
may make provision for any amount treated as remuneration to be treated as an amount of remuneration paid, at such time as may be determined in accordance with the regulations, to or for the benefit of the earner in respect of the earner’s employment;
(b)
may provide, in prescribed cases, for the amount treated as remuneration to be an amount other than the amount foregone in relation to the benefit; and
(c)
may provide for that other amount to be calculated in such manner and on such basis as may be prescribed.
(6E)
Expressions which are used in subsection (6A) and the benefits code have the same meaning in that subsection as they have in that code.
F13(7)
Regulations under this section shall be made by the Treasury with the concurrence of the Department.