Benefits in kind: amount treated as earnings
48After section 203 insert—
“203AEmployment-related benefit provided under optional remuneration arrangements
(1)Where an employment-related benefit 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 benefit is provided, and
(b)section 203(1) does not apply.
(2)To find the relevant amount, first determine which (if any) is the greater of—
(a)the cost of the employment-related benefit, and
(b)the amount foregone with respect to the benefit (see section 69B).
(3)If the cost of the employment-related benefit is greater than or equal to the amount foregone, the “relevant amount” is the cash equivalent (see section 203(2)).
(4)Otherwise, the “relevant amount” is—
(a)the amount foregone with respect to the employment-related benefit, less
(b)any part of the cost of the benefit made good by the employee, to the persons providing the benefit, on or before 6 July following the tax year in which it is provided.
(5)For the purposes of subsections (2) and (3), assume that the cost of the employment-related benefit is zero if the condition in subsection (6) is met.
(6)The condition is that the employment-related benefit would be exempt from income tax but for section 228A (exclusion of certain exemptions).
(7)Where it is necessary for the purposes of subsections (2)(b) and (4) to apportion an amount of earnings to the benefit provided in the tax year, the apportionment is to be made on a just and reasonable basis.
In this subsection “earnings” is to be interpreted in accordance with section 69B(5).”