Part 7A

Employment income provided through third parties
CHAPTER 1

Application etc

Exclusions

Exclusions: commercial transactions
554F
1
Chapter 2 does not apply by reason of a relevant step which is the payment of a sum of money by way of a loan if—
a
the loan is a loan on ordinary commercial terms within the meaning of section 176, ignoring conditions B and C in that section, and
b
there is no connection (direct or indirect) between the relevant step and a tax avoidance arrangement.
2
Chapter 2 does not apply by reason of a relevant step taken by a person (“P”), which is not the payment of a sum of money by way of a loan, if—
a
the step is taken for the sole purpose of a transaction which P has with A and which P entered into in the ordinary course of P's business,
b
a substantial proportion of P's business involves similar transactions with members of the public,
c
the terms on which P entered into the transaction with A are substantially the same as the terms on which P normally enters into similar transactions with members of the public, and
d
there is no connection (direct or indirect) between the relevant step and a tax avoidance arrangement.
3
For the purposes of subsection (2)(b) and (c) a transaction is “similar” if it is of the same or a similar type to the transaction which P has with A.
4
In subsection (2)(b) and (c) “
members of the public
” means members of the public at large with whom P deals at arm's length.
5
In this section references to A include references to any person linked with A.
6
See paragraph 25 of Schedule 11 to F(
No.
2)A 2017 for provision about exclusions where a loan is made on ordinary commercial terms and the relevant step is within paragraph 1 of that Schedule.
S. 554F(6) inserted (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 26
Pt. 7A inserted (with effect in accordance with Sch. 2 paras. 52-59 of the amending Act) by Finance Act 2011 (c. 11), Sch. 2 para. 1
Pt. 7A modified (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 35(6)
Pt. 7A modified (22.7.2020) by 2017 c. 32, Sch. 11 para. 1A(2)(6) (as inserted by Finance Act 2020 (c. 14), s. 16(3))
Pt. 7A modified (16.11.2017) by Finance (No. 2) Act 2017 (c. 32), Sch. 11 para. 1(8)