Part 4

Employment income: exemptions
Chapter 10

Exemptions: termination of employment

Outplacement benefits

Counselling and other outplacement services
310
1
No liability to income tax arises in respect of—
a
the provision of services to a person in connection with the cessation of the person’s employment, or
b
the payment or reimbursement of—
i
fees for such provision, or
ii
travelling expenses incurred in connection with such provision,
if conditions A to D and, in the case of travel expenses, condition E are met.
2
Condition A is that the only or main purpose of the provision of the services is to enable the person to do either or both of the following—
a
to adjust to the cessation of the employment, or
b
to find other gainful employment (including self-employment).
3
Condition B is that the services consist wholly of any or all of the following—
a
giving advice and guidance,
b
imparting or improving skills,
c
providing or making available the use of office equipment or similar facilities.
4
Condition C is that the person has been employed full-time in the employment which is ceasing throughout the period of 2 years ending—
a
at the time when the services begin to be provided, or
b
if earlier, at the time when the employment ceases.
5
Condition D is that the opportunity to receive the services, on similar terms as to payment or reimbursement of any expenses incurred in connection with their provision, is available—
a
generally to employees or former employees of the person’s employer in that employment, or
b
to a particular class or classes of them.
6
Condition E is that the travel expenses are expenses—
a
in respect of which, on the assumptions in subsection (7), mileage allowance relief under Chapter 2 of this Part would be available if no mileage allowance payments had been made, or
b
which, on those assumptions, would be deductible under Part 5.
7
The assumptions are—
a
that receiving the services is one of the duties of the employee’s employment,
b
that the employee incurs and pays the expenses, and
c
if the employment has in fact ceased, that it continues.
8
In this section “mileage allowance payments” has the meaning given by section 229(2).