Part 11

Pay As You Earn
Chapter 4

PAYE: special types of income

Income provided by means of vouchers and tokens

Non-cash vouchers
694
1
If a non-cash voucher to which this section applies is received by an employee, the employer is to be treated, for the purposes of PAYE regulations, as making a payment of PAYE income of the employee of an amount equal to the amount ascertained under section 87(2) or 87A(4) (benefit of non-cash voucher treated as earnings).
2
This section applies to a non-cash voucher to which Chapter 4 of Part 3 (taxable benefits: vouchers and credit-tokens) applies if—
a
either of the conditions set out below is met with respect to the voucher, and
b
the voucher is not of a description for the time being excluded from the scope of this section by PAYE regulations.
3
The first condition is met with respect to a non-cash voucher if it is capable of being exchanged for anything which, if provided to the employee at the time when the voucher is received, would fall to be regarded as a readily convertible asset.
4
The second condition is met with respect to a non-cash voucher if (but for section 701(2)(b)) it would fall itself to be regarded as a readily convertible asset.
5
A payment under subsection (1) is made—
a
in the case of a non-cash voucher other than a cheque voucher, at the time when the cost of provision is incurred or, if later, the time when the voucher is received by the employee;
b
in the case of a cheque voucher, at the time when the voucher is handed over in exchange for money, goods or services.
6
For the purposes of subsection (5)—
- “cheque voucher” has the same meaning as in Chapter 4 of Part 3;
- “cost of provision”, in relation to a voucher provided by an employer, has the meaning given by section 87;
- and a cheque voucher that is posted is to be treated as handed over at the time of posting.
7
A non-cash voucher provided for an employee and appropriated to the employee—
a
by attaching it to a card held for the employee, or
b
in any other way,
is to be treated for the purposes of this section as having been received by the employee at the time when it is appropriated.
Words in s. 694(1) inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 58
Pt. 11 power to amend or repeal conferred (21.7.2009) by Finance Act 2009 (c. 10), Sch. 58 para. 10