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Finance (No. 2) Act 2017

Status:

This is the original version (as it was originally enacted).

Income tax: employment and pensions

1Taxable benefits: time limit for making good

(1)Part 3 of ITEPA 2003 (employment income: earnings and benefits etc treated as earnings) is amended as follows.

(2)In section 87 (cash equivalent of benefit of non-cash voucher)—

(a)in subsection (2)(b), for “to the person incurring it” substitute “, to the person incurring it, on or before 6 July following the relevant tax year”, and

(b)after subsection (2) insert—

(2A)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.

(2B)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.

(3)In section 88(3) (time at which cheque voucher treated as handed over), at the beginning insert “For the purposes of subsection (2) and sections 87(2B) and 87A(6),”.

(4)In section 94(2) (cash equivalent of benefit of credit-token), in paragraph (b), for the words from “employee” to the end substitute employee—

(i)to the person incurring it, and

(ii)on or before 6 July following the tax year which contains the occasion in question.

(5)In section 105(2) (cash equivalent of benefit of living accommodation costing £75,000 or less), in paragraph (b), after “made good” insert “, on or before 6 July following the tax year which contains the taxable period,”.

(6)In section 106(3) (cash equivalent of benefit of living accommodation costing over £75,000), in paragraph (a), for the words from “paid” to “exceeds” substitute paid—

(i)by the employee,

(ii)in respect of the accommodation,

(iii)to the person providing it, and

(iv)on or before 6 July following the tax year which contains the taxable period,

exceeds.

(7)In section 144 (deduction for payments for private use of car)—

(a)in subsection (1)(b), for “in” substitute “on or before 6 July following”,

(b)in subsection (2), after “paid” insert “as mentioned in subsection (1)(b)”, and

(c)in subsection (3), after “paid” insert “as mentioned in subsection (1)(b)”.

(8)In section 151(2) (when cash equivalent of benefit of car fuel is nil)—

(a)in the words before paragraph (a) omit “in the tax year in question”,

(b)in paragraph (a), at the beginning insert “in the tax year in question,”, and

(c)in paragraph (b), at the end insert “on or before 6 July following that tax year”.

(9)In section 152(2) (car fuel: proportionate reduction of cash equivalent)—

(a)in the words before paragraph (a) omit “for any part of the tax year in question”,

(b)in paragraph (a), at the beginning insert “for any part of the tax year in question,”,

(c)in paragraph (b), at the beginning insert “for any part of the tax year in question,”, and

(d)in paragraph (c)—

(i)after “employee”, in the first place it occurs, insert

(i)for any part of the tax year in question,, and

(ii)for “and the employee does make good that expense” substitute , and

(ii)the employee does make good that expense on or before 6 July following that tax year.

(10)In section 158 (reduction for payments for private use of van)—

(a)in subsection (1)(b), for “in” substitute “on or before 6 July following”,

(b)in subsection (2), after “paid” insert “as mentioned in subsection (1)(b)”, and

(c)in subsection (3), after “paid” insert “as mentioned in subsection (1)(b)”.

(11)In section 162(2) (when cash equivalent of benefit of van fuel is nil)—

(a)in the words before paragraph (a) omit “in the tax year in question”,

(b)in paragraph (a), at the beginning insert “in the tax year in question,”, and

(c)in paragraph (b), at the end insert “on or before 6 July following that tax year”.

(12)In section 163(3) (van fuel: proportionate reduction of cash equivalent)—

(a)in the words before paragraph (a) omit “for any part of the tax year in question”,

(b)in paragraph (a), at the beginning insert “for any part of the tax year in question,”,

(c)in paragraph (b), at the beginning insert “for any part of the tax year in question,”, and

(d)in paragraph (c)—

(i)after “employee”, in the first place it occurs, insert

(i)for any part of the tax year in question,, and

(ii)for “and the employee does make good that expense” substitute , and

(ii)the employee does make good that expense on or before 6 July following that tax year.

(13)In section 203(2) (cash equivalent of benefit treated as earnings), for “to the persons providing the benefit” substitute “, to the persons providing the benefit, on or before 6 July following the tax year in which it is provided”.

(14)The amendments made by this section have effect for the purpose of calculating income tax charged for the tax year 2017-18 or any subsequent tax year.

2Taxable benefits: ultra-low emission vehicles

(1)ITEPA 2003 is amended as follows.

(2)In section 139 (car with a CO2 emissions figure: the appropriate percentage), for subsections (1) to (6) substitute—

(1)The appropriate percentage for a year for a car with a CO2 emissions figure of less than 75 is determined in accordance with the following table.

Car Appropriate percentage
Car with CO2 emissions figure of 02%
Car with CO2 emissions figure of 1 - 50
  • Car with electric range figure of 130 or more

2%
  • Car with electric range figure of 70 - 129

5%
  • Car with electric range figure of 40 - 69

8%
  • Car with electric range figure of 30 - 39

12%
  • Car with electric range figure of less than 30

14%
Car with CO2 emissions figure of 51 - 54 15%
Car with CO2 emissions figure of 55 - 5916%
Car with CO2 emissions figure of 60 - 6417%
Car with CO2 emissions figure of 65 - 6918%
Car with CO2 emissions figure of 70 - 7419%

(2)For the purposes of subsection (1) and the table, if a CO2 emissions figure or an electric range figure is not a whole number, round it down to the nearest whole number.

(3)The appropriate percentage for a year for a car with a CO2 emissions figure of 75 or more is whichever is the lesser of—

(a)20% plus one percentage point for each 5 grams per kilometre driven by which the CO2 emissions figure exceeds 75, and

(b)37%.

(4)For the purposes of subsection (3), if a CO2 emissions figure is not a multiple of 5, round it down to the nearest multiple of 5.

(5)In this section, an “electric range figure” is the number of miles which is the equivalent of the number of kilometres specified in an EC certificate of conformity, an EC type-approval certificate or a UK approval certificate on the basis of which a car is registered, as being the maximum distance for which the car can be driven in electric mode without recharging the battery.

(3)In section 140 (car without a CO2 emissions figure: the appropriate percentage)—

(a)in subsection (2), in the table —

(i)for “23%” substitute “24%”, and

(ii)for “34%” substitute “35%”;

(b)in subsection (3)(a), for “16%” substitute “2%”.

(4)In section 142(2) (car first registered before 1 January 1998: the appropriate percentage), in the table—

(a)for “23%” substitute “24%”, and

(b)for “34%” substitute “35%”.

(5)Omit subsection 170(3).

(6)The amendments made by this section have effect for the tax year 2020-21 and subsequent tax years.

3Pensions advice

(1)In Chapter 9 of Part 4 of ITEPA 2003, after section 308B insert—

308CProvision of pensions advice: limited exemption

(1)No liability to income tax arises in respect of—

(a)the provision of relevant pensions advice to an employee or former or prospective employee, or

(b)the payment or reimbursement of costs incurred, by or in respect of an employee or former or prospective employee, in obtaining relevant pensions advice,

if Condition A or B is met.

(2)But subsection (1) does not apply in relation to a person in a tax year so far as the value of the exemption in the person’s case in that year exceeds £500.

(3)The “value of the exemption”, in relation to a person and a tax year, is the amount exempted by subsection (1) from income tax in the person’s case in that year, disregarding subsection (2) for this purpose.

(4)If in a tax year there is in relation to an individual more than one person who is an employer or former employer, subsections (1) to (3) apply in relation to the individual as employee or former or prospective employee of any one of those persons separately from their application in relation to the individual as employee or former or prospective employee of any other of those persons.

(5)“Relevant pensions advice”, in relation to a person, means information, or advice, in connection with—

(a)the person’s pension arrangements, or

(b)the use of the person’s pension funds.

(6)Condition A is that the relevant pensions advice, or payment or reimbursement, is provided under a scheme that is open—

(a)to the employer’s employees generally, or

(b)generally to the employer’s employees at a particular location.

(7)Condition B is that the relevant pensions advice, or payment or reimbursement, is provided under a scheme that is open generally to the employer’s employees, or generally to those of the employer’s employees at a particular location, who—

(a)have reached the minimum qualifying age, or

(b)meet the ill-health condition.

(8)The “minimum qualifying age”, in relation to an employee, means the employee’s relevant pension age less 5 years.

(9)“Relevant pension age”, in relation to an employee, means—

(a)where paragraph 22 or 23 of Schedule 36 to FA 2004 applies in relation to the employee and a registered pension scheme of which the employee is a member, the employee’s protected pension age (see paragraph 22(8) and 23(8) of Schedule 36 to FA 2004), or

(b)in any other case, the employee’s normal minimum pension age, as defined by section 279(1) of FA 2004.

(10)The “ill-health condition” is met by an employee if the employer is satisfied, on the basis of evidence provided by a registered medical practitioner, that the employee is (and will continue to be) incapable of carrying on his or her occupation because of physical or mental impairment.

(2)In section 228 of ITEPA 2003 (effect of exemptions on liability under provisions outside Part 2 of ITEPA 2003), in subsection (2), after paragraph (da) insert—

(db)section 308C (provision of pensions advice),.

(3)Regulation 5 of the Income Tax (Exemption of Minor Benefits) Regulations 2002 (S.I. 2002/205) (exemption in respect of the provision of pensions advice) is revoked.

(4)In regulation 2 of the Income Tax (Exemption of Minor Benefits) (Amendment) Regulations 2004 (S.I. 2004/3087) omit the inserted regulation 5.

(5)The amendments made by this section have effect for the tax year 2017-18 and subsequent tax years.

4Legal expenses etc

(1)ITEPA 2003 is amended as follows.

(2)In section 346 (deduction for employee liabilities)—

(a)in the heading, at the end insert “and expenses”,

(b)after paragraph B (in subsection (1)) insert—

BAPayment of any costs or expenses not falling within paragraph B which are incurred in connection with the employee giving evidence about matters related to the employment in, or for the purposes of—

(a)a proceeding or other process (whether or not involving the employee), or

(b)an investigation (whether or not likely to lead to any proceeding or other process involving the employee).

BBPayment of any costs or expenses not falling within paragraph B or BA which are incurred in connection with a proceeding or other process, or an investigation, in which—

(a)acts of the employee related to the employment, or

(b)any other matters related to the employment,

are being or are likely to be considered.,

(c)in paragraph C(b) (in subsection (1)), after “B” insert “, BA or BB”,

(d)in subsection (2) for “or B” substitute “B, BA or BB”,

(e)in subsection (2A), for “paragraph A, B or C” substitute “any of paragraphs A to C”, and

(f)after subsection (3) insert—

(4)In this section and section 349—

(a)“acts” includes failures to act and acts are “related to the employment” if the employee was acting—

(i)in the employee’s capacity as holder of the employment, or

(ii)in any other capacity in which the employee was acting in the performance of the duties of the employment,

(b)“giving evidence” includes making a formal or informal statement or answering questions,

(c)“proceeding or other process” includes any civil, criminal or arbitration proceedings, any disciplinary or regulatory proceedings of any kind and any process operated for resolving disputes or adjudicating on complaints, and

(d)references to a proceeding or other process or an investigation include a reference to a proceeding or other process or an investigation that is likely to take place.

(3)In section 349 (section 346: meaning of “qualifying insurance contract”), in subsection (2)—

(a)after paragraph (c) insert—

(ca)the payment of costs or expenses incurred in connection with an employee giving evidence about matters related to the employee’s employment in, or for the purposes of—

(i)a proceeding or other process (whether or not involving the employee), or

(ii)an investigation (whether or not likely to lead to any proceeding or other process involving the employee),

(cb)the payment of any costs or expenses incurred in connection with a proceeding or other process, or an investigation, in which—

(i)acts of an employee related to the employment, or

(ii)any other matters related to the employment of an employee,

are being or are likely to be considered,, and

(b)in subsection (2)(d), after “(c)” insert “, (ca) or (cb)”.

(4)In section 409 (payments and benefits on termination of employment etc: exception for payments and benefits in respect of employee liabilities and indemnity insurance)—

(a)in the heading, for “employee liabilities” substitute “certain legal expenses etc”, and

(b)in subsection (3), at the end insert “or by the employer or former employer on behalf of the individual”.

(5)In section 410 (payments and benefits on termination of employment etc: exception for certain payments and benefits received by personal representatives of deceased individual)—

(a)in the heading for “employee liabilities” substitute “certain legal expenses etc”, and

(b)in subsection (3), at the end insert “or by the former employer on behalf of the individual’s personal representatives”.

(6)In section 558 (deductions for liabilities of former employees: meaning of “deductible payment”)—

(a)after paragraph B (in subsection (1)) insert—

BAPayment of any costs or expenses not falling within paragraph B which are incurred in connection with the former employee giving evidence about matters related to the former employment in, or for the purposes of—

(a)a proceeding or other process (whether or not involving the former employee), or

(b)an investigation (whether or not likely to lead to any proceeding or other process involving the former employee).

BBPayment of any costs or expenses not falling within paragraph B or BA which are incurred in connection with a proceeding or other process, or an investigation, in which—

(a)acts of the former employee related to the former employment, or

(b)any other matters related to the former employment,

are being or are likely to be considered., and

(b)in paragraph C(b) (in subsection (1)), after “B” insert “, BA or BB”,

(c)in subsection (2), for “or B” substitute “B, BA or BB”,

(d)after subsection (3) insert—

(4)In this section and section 560—

(a)“acts” includes failures to act and acts are “related to the former employment” if the former employee was acting—

(i)in the employee’s capacity as holder of the former employment, or

(ii)in any other capacity in which the former employee was acting in the performance of the duties of that employment,

(b)“giving evidence” includes making a formal or informal statement or answering questions,

(c)“proceeding or other process” includes any civil, criminal or arbitration proceedings, any disciplinary or regulatory proceedings of any kind and any process operated for resolving disputes or adjudicating on complaints, and

(d)references to a proceeding or other process or an investigation include a reference to a proceeding or other process or an investigation that is likely to take place.

(7)In section 560 (section 558: meaning of “qualifying insurance contract”), in subsection (2)—

(a)after paragraph (c) insert—

(ca)the payment of costs or expenses incurred in connection with a former employee giving evidence about matters related to the former employment in, or for the purposes of—

(i)a proceeding or other process (whether or not involving the former employee), or

(ii)an investigation (whether or not likely to lead to any proceeding or other process involving the former employee).

(cb)the payment of any costs or expenses incurred in connection with a proceeding or other process, or an investigation, in which—

(i)acts of a former employee related to the employment, or

(ii)any other matters related to the former employment of a former employee,

are being or are likely to be considered,, and

(b)in paragraph (d), after “(c)” insert “, (ca) or (cb)”.

(8)The amendments made by this section have effect in relation to the tax year 2017-18 and subsequent tax years.

5Termination payments etc: amounts chargeable on employment income

(1)ITEPA 2003 is amended in accordance with subsections (2) to (9).

(2)In section 7(5) (list of provisions under which amounts are treated as earnings), before the “or” at the end of paragraph (c) insert—

(ca)section 402B (termination payments, and other benefits, that cannot benefit from section 403 threshold),.

(3)Before section 403 (charge on payments and benefits in excess of £30,000 threshold) insert—

402ASplit of payments and other benefits between sections 402B and 403

(1)In this Chapter “termination award” means a payment or other benefit to which this Chapter applies because of section 401(1)(a).

(2)Section 402B (termination awards not benefiting from threshold treated as earnings) applies to termination awards to the extent determined under section 402C.

(3)Section 403 (charge on payment or benefit where threshold applies) applies to termination awards so far as they are not ones to which section 402B applies.

(4)Section 403 also applies to payments and other benefits to which this Chapter applies because of section 401(1)(b) or (c) (change in duties or earnings).

402BTermination awards not benefiting from threshold to be treated as earnings

(1)The amount of a termination award to which this section applies is treated as an amount of earnings of the employee, or former employee, from the employment.

(2)See also section 7(3)(b) and (5)(ca) (which cause amounts treated as earnings under this section to be included in general earnings).

(3)Section 403(3) (when benefits are received) does not apply in relation to payments or other benefits to which this section applies.

402CThe termination awards to which section 402B applies

(1)This section has effect for the purpose of identifying the extent to which section 402B applies to termination awards in respect of the termination of the employment of the employee.

(2)In this section “relevant termination award” means a termination award that is neither—

(a)a redundancy payment, nor

(b)so much of an approved contractual payment as is equal to or less than the amount which would have been due if a redundancy payment had been payable.

(3)If the post-employment notice pay (see section 402D) in respect of the termination is greater than, or equal to, the total amount of the relevant termination awards in respect of the termination, section 402B applies to all of those relevant termination awards.

(4)If the post-employment notice pay in respect of the termination is less than the total amount of the relevant termination awards in respect of the termination but is not nil—

(a)section 402B applies to a part of those relevant termination awards, and

(b)the amount of that part is equal to the post-employment notice pay.

(5)Section 309(4) to (6) (meaning of “redundancy payment” and “approved contractual payment” etc) apply for the purposes of subsection (2) as they apply for the purposes of section 309.

402D“Post-employment notice pay”

(1)“The post-employment notice pay” in respect of a termination is (subject to subsection (11)) given by—

where—

  • BP, D and P are given by subsections (3) to (7), and

  • T is the total of the amounts of any payment or benefit received in connection with the termination which—

    (a)

    would fall within section 401(1)(a) but for section 401(3),

    (b)

    is taxable as earnings under Chapter 1 of Part 3,

    (c)

    is not pay in respect of holiday entitlement for a period before the employment ends, and

    (d)

    is not a bonus payable for termination of the employment.

(2)If the amount given by the formula in subsection (1) is a negative amount, the post-employment notice pay is nil.

(3)Subject to subsections (5) and (6)

  • BP is the employee’s basic pay (see subsection (7)) from the employment in respect of the last pay period of the employee to end before the trigger date,

  • P is the number of days in that pay period, and

  • D is the number of days in the post-employment notice period.

(4)See section 402E for the meaning of “trigger date” and “post-employment notice period”.

(5)If there is no pay period of the employee which ends before the trigger date then—

  • BP is the employee’s basic pay from the employment in respect of the period starting with the first day of the employment and ending with the trigger date,

  • P is the number of days in that period, and

  • D is the number of days in the post-employment notice period.

(6)If the last pay period of the employee to end before the trigger date is a month, the minimum notice (see section 402E) is given by contractual terms and is expressed to be a whole number of months, and the post-employment notice period is equal in length to the minimum notice or is otherwise a whole number of months, then—

  • BP is the employee’s basic pay from the employment in respect of the last pay period of the employee to end before the trigger date,

  • P is 1, and

  • D is the length of the post-employment notice period expressed in months.

(7)In this section “basic pay” means—

(a)employment income of the employee from the employment but disregarding—

(i)any amount received by way of overtime, bonus, commission, gratuity or allowance,

(ii)any amount received in connection with the termination of the employment,

(iii)any amount treated as earnings under Chapters 2 to 10 of Part 3 (the benefits code) or which would be so treated apart from section 64,

(iv)any amount which is treated as earnings under Chapter 12 of Part 3 (amounts treated as earnings),

(v)any amount which counts as employment income by virtue of Part 7 (income relating to securities and securities options), and

(vi)any employment-related securities that constitute earnings under Chapter 1 of Part 3 (earnings), and

(b)any amount which the employee has given up the right to receive but which would have fallen within paragraph (a) had the employee not done so.

(8)In subsection (7) “employment-related securities” has the same meaning as it has in Chapter 1 of Part 7 (see section 421B).

(9)The Treasury may by regulations amend this section for the purpose of altering the meaning of “basic pay”.

(10)A statutory instrument containing regulations under subsection (9) may not be made unless a draft of it has been laid before, and approved by a resolution of, the House of Commons.

(11)Where the purpose, or one of the purposes, of any arrangements is the avoidance of tax by causing the post-employment notice pay calculated under subsection (1) to be less than it would otherwise be, the post-employment notice pay is to be treated as the amount which the post-employment notice pay would have been but for the arrangements.

(12)In subsection (11) “arrangements” includes any scheme, arrangement or understanding of any kind, whether or not legally enforceable, involving a single transaction or two or more transactions.

402EMeaning of “trigger date” and “post-employment notice period” in section 402D

(1)Subsections (2) and (4) to (6) have effect for the purposes of section 402D (and subsection (4) has effect also for the purposes of this section).

(2)The “trigger date” is—

(a)if the termination is not a notice case, the last day of the employment, and

(b)if the termination is a notice case, the day the notice is given.

(3)For the purposes of this section, the termination is a “notice case” if the employer or employee gives notice to the other to terminate the employment, and here it does not matter—

(a)whether the notice is more or less than, or the same as, the minimum notice, or

(b)if the employment ends before the notice expires.

(4)The “minimum notice” is the minimum notice required to be given by the employer to terminate the employee’s employment by notice in accordance with the law and contractual terms effective—

(a)where the termination is not a notice case—

(i)immediately before the employment ends, or

(ii)where the employment ends by agreement entered into after the start of the employment, immediately before the agreement is entered into, and

(b)where the termination is a notice case, immediately before the notice is given.

(5)The “post-employment notice period” is the period—

(a)beginning at the end of the last day of the employment, and

(b)ending with the earliest lawful termination date.

(But see subsection (8) for provision about limited-term contracts.)

(6)If the earliest lawful termination date is, or precedes, the last day of the employment, the number of days in the post-employment notice period is nil.

(7)“The earliest lawful termination date” is the last day of the period which—

(a)is equal in length to the minimum notice, and

(b)begins at the end of the trigger date.

(8)In the case of a contract of employment which is a limited-term contract and which does not include provision for termination by notice by the employer, the post-employment notice period is the period—

(a)beginning at the end of the last day of the employment, and

(b)ending with the day of the occurrence of the limiting event.

(9)If, in a case to which subsection (8) applies, on the last day of the employment the day of the occurrence of the limiting event is not ascertained or ascertainable (because, for example, the limiting event is the performance of a task), then subsection (8) has effect as if for paragraph (b) there were substituted—

(b)ending with the day on which notice would have expired if the employer had, on the last day of the employment, given to the employee the minimum notice required to terminate the contract under section 86 of the Employment Rights Act 1996 (assuming that that section applies to the employment).

(10)In this section “limited-term contract” and “limiting event” have the same meaning as in the Employment Rights Act 1996 (see section 235(2A) and (2B)).

(4)In section 403 (charges on payments and benefits which can benefit from threshold)—

(a)in subsection (1), for “Chapter” substitute “section”,

(b)in subsection (3), after “Chapter” insert “(but see section 402B(3))”,

(c)in subsection (4), for the words from “when” to “exceeds” substitute when aggregated with—

(a)other payments or benefits in respect of the employee or former employee that are payments or benefits to which this section applies, and

(b)other payments or benefits in respect of the employee or former employee that are payments or benefits—

(i)received in the tax year 2017-18 or an earlier tax year, and

(ii)to which this Chapter applied in the tax year of receipt,

it exceeds,

(d)in subsection (5)(a), for “Chapter” substitute “section”,

(e)in subsection (6), after “employment income” insert “or, as the case may be, in relation to whom section 402B(1) provides for an amount to be treated as an amount of earnings”, and

(f)in the heading, at the end insert “where threshold applies”.

(5)In section 404 (how the threshold applies)—

(a)in subsection (3)(b) (meaning of “termination or change date”), for “this Chapter” substitute “section 403”, and

(b)after subsection (5) insert—

(6)In subsection (3)(b), the reference to a payment or other benefit to which section 403 applies includes a reference to a payment or other benefit—

(a)received in the tax year 2017-18 or an earlier tax year, and

(b)to which this Chapter applied in the tax year of receipt.

(6)After section 404A insert—

404BPower to vary threshold

(1)The Treasury may by regulations amend the listed provisions by substituting, for the amount for the time being mentioned in those provisions, a different amount.

(2)The listed provisions are—

  • subsections (1), (4) and (5) of section 403, and

  • subsections (1), (4) and (5) of section 404 and its heading.

(3)Regulations under this section may include transitional provision.

(4)A statutory instrument containing regulations under this section which reduce the mentioned amount may not be made unless a draft of it has been laid before, and approved by a resolution of, the House of Commons.

(7)In section 406 (exception in cases of death, injury or disability)—

(a)the existing text becomes subsection (1), and

(b)after that subsection insert—

(2)Although “injury” in subsection (1) includes psychiatric injury, it does not include injured feelings.

(8)In section 414(2) (proportionate reduction for foreign service in certain cases), for “otherwise count as employment income under this Chapter” substitute otherwise—

(a)be treated as earnings by section 402B(1), or

(b)count as employment income as a result of section 403.

(9)In section 717(4) (regulations etc not subject to negative procedure), before “or section 681F(3)” insert “, section 402D(10) (meaning of basic pay for purpose of calculating charge on termination award), section 404B(4) (reduction of tax-free threshold for employment-termination etc payments)”.

(10)The amendments made by this section have effect for the tax year 2018-19 and subsequent tax years.

6PAYE settlement agreements

(1)In Chapter 5 of Part 11 of ITEPA 2003 (PAYE settlement agreements), in sections 703(a) and 704(1)(a), for “an officer of Revenue and Customs” substitute “Her Majesty’s Revenue and Customs”.

(2)The amendment made by this section has effect in relation to the tax year 2018-19 and subsequent tax years.

7Money purchase annual allowance

(1)Part 4 of FA 2004 is amended as follows.

(2)In section 227ZA (chargeable amount), in subsection (1)(b), for “£10,000” substitute “£4,000”.

(3)In section 227B (alternative chargeable amount), in subsections (1)(b) and (2), for “£10,000” substitute “£4,000”.

(4)In section 227D (pension input amounts in respect of certain hybrid arrangements), in Steps 4 and 5 of subsection (4), for “£10,000” substitute “£4,000”.

(5)The amendments made by this section have effect for the tax year 2017-18 and subsequent tax years.

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