Part 3

Employment income: earnings and benefits etc. treated as earnings
Chapter 4

Taxable benefits: vouchers and credit-tokens

Benefit of non-cash voucher treated as earnings

Benefit of non-cash voucher treated as earnings: optional remuneration arrangements
87A
1
Where a non-cash voucher to which this Chapter applies is provided pursuant to optional remuneration arrangements—
a
the relevant amount is to be treated as earnings from the employment for the tax year in which the voucher is received by the employee, and
b
section 87(1) does not apply.
2
To find the relevant amount, first determine which (if any) is the greater of—
a
the cost of provision (see section 87(3)), and
b
the amount foregone with respect to the benefit of the voucher (see section 69B).
3
If the cost of provision is greater than or equal to the amount foregone, the “relevant amount” is the cash equivalent of the benefit of the non-cash voucher (see section 87(2)).
4
Otherwise, the “relevant amount” is the difference between—
a
the amount foregone, and
b
any part of the cost of provision that is made good by the employee, to the person incurring it, on or before 6 July following the relevant tax year.
5
If the voucher is a non-cash voucher other than a cheque voucher, the relevant tax year is—
a
the tax year in which the cost of provision is incurred, or
b
if later, the tax year in which the employee receives the voucher.
6
If the voucher is a cheque voucher, the relevant tax year is the tax year in which the voucher is handed over in exchange for money, goods or services.
7
For the purposes of subsections (2) and (3), assume that the cost of provision is zero if the condition in subsection (8) is met.
8
The condition is that the non-cash voucher would be exempt from income tax but for section 228A (exclusion of certain exemptions).
S. 87A inserted (with effect in accordance with Sch. 2 para. 62 of the amending Act) by Finance Act 2017 (c. 10), Sch. 2 para. 4