http://www.legislation.gov.uk/ukpga/2003/1/section/312AIncome Tax (Earnings and Pensions) Act 2003An Act to restate, with minor changes, certain enactments relating to income tax on employment income, pension income and social security income; and for connected purposes.texttext/xmlenStatute Law Database2026-09-22Expert Participation2026-07-15 Income Tax (Earnings and Pensions) Act 2003s. 452(2)(aa)Finance Act 2013Sch. 23 para. 11Sch. 23 para. 38art. 2Income Tax (Earnings and Pensions) Act 2003s. 114(1)(a)(i)(ii)Finance Act 2026s. 17(2)(b)(5)s. 17(6)-(9)Income Tax (Earnings and Pensions) Act 2003s. 116(1)(a)(b)Finance Act 2026s. 17(3)(b)(5)s. 17(6)-(9)Income Tax (Earnings and Pensions) Act 2003s. 116AFinance Act 2026s. 17(4)(5)s. 17(6)-(9)Income Tax (Earnings and Pensions) Act 2003s. 221AFinance Act 2026s. 22(1)s. 22(2) Part 4CHAPTER 10A312A1This section applies in relation to qualifying bonus payments made, in a tax year (“the tax year”), by an employer which is a company to an employee or former employee of the employer.2No liability to income tax arises in respect of the qualifying bonus payments if, or to the extent that, the total chargeable amount in respect of those payments does not exceed £3,600 (“the exempt amount”).3If qualifying bonus payments are made to the same person by two or more employers in the tax year, subsection (2) applies separately in relation to the total payments made by each employer, unless subsection (4) applies.4If two or more employers are members of the same group at the time each of them first makes a qualifying bonus payment to the employee or former employee in the tax year, subsection (2) applies as if the reference to the qualifying bonus payments were to all the qualifying bonus payments made by those employers to the employee or former employee in that tax year.5If, in a tax year—aan employer makes a payment when it is a member of a group, andblater in that tax year the employer ceases to be a member of that group,the employer is treated for the purposes of this section as remaining a member of that group for the remainder of the tax year (without prejudice to it also being a member of any other group).6In applying subsection (2)—athe exempt amount is set against payments in the order in which they are made, andbif two or more payments are made on the same day, which together take the total payments made in the tax year over the exempt amount, subsection (7) applies to determine the amount of each of those payments which is exempt.7In a case within subsection (6)(b), the amount of a payment which is exempt is given by the formula— P SP × REAwhere—P is the amount of the payment,SP is the sum of that payment and the other payments made on the same day, andREA is so much of the exempt amount as remains after taking account of any qualifying bonus payments previously made in the tax year.8Where subsection (2) applies separately to different payments by virtue of subsection (3), subsections (6) and (7) also apply to those payments separately.9The Treasury may by order increase or reduce the sum of money specified in subsection (2).10A statutory instrument containing an order under this section which reduces the sum of money specified may not be made unless a draft of it has been laid before and approved by a resolution of the House of Commons.11In this section “chargeable amount”, in respect of a qualifying bonus payment, means the amount of employment income which would be charged to tax in respect of that qualifying bonus payment, apart from this section.

Pt. 4 Ch. 10A inserted (with effect in accordance with Sch. 37 para. 8 of the amending Act) by Finance Act 2014 (c. 26), Sch. 37 para. 5Pt. 4 modified (10.6.2021) by Finance Act 2021 (c. 26), s. 26(3)