The Social Security (Contributions) (Amendment No. 3) Regulations 2001

• Citation: S.I. 2001/596
• Sections: 111

Section 1 Citation, commencement and effect

(1) These Regulations may be cited as the Social Security (Contributions) (Amendment No. 3) Regulations 2001 and shall come into force on 6th April 2001.

(2) The amendment made by regulation 9 shall have effect in relation to any time in the tax year beginning with 6th April 2000, and to subsequent tax years, and the amendments made by the other provisions of these Regulations shall have effect in relation to the tax year beginning with 6th April 2001 and to subsequent tax years.

Section 2 Interpretation

In these Regulations “the principal Regulations ” means the Social Security (Contributions) Regulations 1979 , and, in the following provisions of these Regulations, except where otherwise expressly provided, a reference to a numbered regulation or Schedule is a reference to the regulation of, or Schedule to, the principal Regulations which bears that number.

Section 3 Amendment of the principal Regulations

Amend the principal Regulations in accordance with the following provisions of these Regulations.

Section 4 Amendment of the principal Regulations

In regulation 1(2) (interpretation) after the definition of “British ship” insert—

“cash voucher” has the meaning given to it in section 143 of the Income and Corporation Taxes Act 1988 (cash vouchers taxable under PAYE ) ;

Section 5 Amendment of the principal Regulations

For regulation 18 (calculation of earnings) substitute—

Calculation of earnings for the purpose of earnings-related contributions

(18) For the purpose of determining the amount of earnings-related contributions, the amount of a person’s earnings from employed earner’s employment shall be calculated on the basis of his gross earnings from the employment or employments in question.

This is subject to the provisions of Schedule 1ZB (calculation of earnings for the purposes of earnings-related contributions in particular cases) and Schedule 1ZC to these Regulations (payments to be disregarded in the calculation of earnings).

Section 6 Amendment of the principal Regulations

For regulation 19 (payments to be disregarded in the calculation of earnings) substitute—

Payments to be disregarded in the calculation of earnings for the purpose of earnings-related contributions

(19) Schedule 1ZC specifies payments which are to be disregarded in the calculation of earnings from employed earner’s employment for the purpose of earnings-related contributions.

Section 7 Amendment of the principal Regulations

(1) Amend regulation 22HA (prescribed emoluments in respect of which Class 1A contributions are not payable) as follows.

(2) In paragraph (2), for the words from “by virtue of” to the end substitute—

by virtue of the following provisions of Schedule 1ZC to these Regulations—

in Part VI, paragraphs 4 to 7;

in Part VIII, paragraphs 4, 5 and 12;

in Part IX, paragraphs 2 to 7; and

in Part X, paragraphs 5, 9 and 11 to 13.

(3) In paragraph (3)—

(a) for “regulation 19(1)(d) of these Regulations” substitute “paragraph 1 of Part II of Schedule 1ZC to these Regulations (payments in kind)”;

(b) for “regulation 19(1)(zg) of these Regulations” substitute “paragraph 3 of Part VIII of Schedule 1ZC to these Regulations (qualifying travelling expenses)”; and

(c) for “regulation 19(4)(b) of these Regulations” substitute “paragraph 9 of Part VIII of Schedule 1ZC to these Regulations (specific and distinct expenses)”.

(4) In paragraph (4) for “regulation 19(1)(zc)(ii) of these Regulations” substitute “paragraph 2(2)(b) of Part VIII of Schedule 1ZC to these Regulations (relocation expenses where the relevant change occurred before 6th April 1998)”.

(5) In paragraph (7) for sub-paragraph (g) substitute—

(g) A57 (staff suggestion schemes);

Section 8 Amendment of the principal Regulations

In regulation 43D(2)(Class 2 and Class 3 contributions paid late through ignorance or error) for the words from “the amount of such a contribution” to the end substitute—

the amount of that contribution shall be calculated by reference to the weekly rate at which a contribution paid under section 12 of the Social Security Contributions and Benefits Act 1992 would have been payable if it had been paid at the time when the period began.

Section 9 Amendment of the principal Regulations

In regulation 119(2)(b) (conditions as to residence or presence in Great Britain and liability for Class 1A contribution) for “in respect of any car” substitute “in respect of something”.

Section 10 Amendment of the principal Regulations

After Schedule 1ZA (elections about share option gains) insert (as Schedule 1ZB) the Schedule set out in Schedule 1 to these Regulations.

Section 11 Amendment of the principal Regulations

After Schedule 1ZB (inserted by regulation 10 of these Regulations) insert (as Schedule 1ZC) the Schedule set out in Schedule 2 to these Regulations.

Section 12 Amendment of the principal Regulations

Omit Schedules 1A , 1B and 1C .

Section 1 Calculation of earnings

(1) This Schedule contains rules for the calculation of earnings in the assessment of earnings-related contributions in particular cases.

(2) In this Schedule—

“the Taxes Act ” means the Income and Corporation Taxes Act 1988;

“Schedule 1ZC” means Schedule 1ZC to these Regulations; and

“Schedule E” means the Schedule referred to as Schedule E in the Taxes Act.

(3) In this Schedule unless the context otherwise requires—

(a) a reference to a numbered paragraph, is a reference to the paragraph in this Schedule bearing that number;

(b) a reference in a paragraph to a numbered sub-paragraph is a reference to the sub-paragraph of that paragraph bearing that number;

(c) a reference in a sub-paragraph to a lettered paragraph is a reference to the paragraph of that sub-paragraph bearing that letter; and

(d) a reference in a lettered paragraph to a numbered head is a reference to the head in that lettered paragraph bearing that number.

Section 2 Calculation of earnings in respect of beneficial interest in assets within Part IV of Schedule 1ZC

(1) Except where paragraph 3, 4, 5 or 6 applies, the amount of earnings comprised in any payment by way of the conferment of any beneficial interest in any asset specified in Part IV of Schedule 1ZC, and which falls to be taken into account in the calculation of a person’s earnings shall be calculated or estimated at a price which that beneficial interest might reasonably be expected to fetch if sold in the open market on the day on which it is conferred.

(2) For the purposes of sub-paragraph (1), where any asset is not quoted on a recognised stock exchange within the meaning of section 841 of the Taxes Act, it shall be assumed that, in the open market which is postulated, there is available to any prospective purchaser of the beneficial interest in the asset in question all the information which a prudent prospective purchaser might reasonably require if he were proposing to purchase it from a willing vendor by private treaty and at arm’s length.

Section 3 Valuation of beneficial interest in units in a unit trust scheme

The amount of earnings which is comprised in any payment by way of the conferment of a beneficial interest in any units in a unit trust scheme (within the meaning of section 75(8) of the Financial Services Act 1986 ) having a published selling price and which falls to be taken into account in the calculation of a person’s earnings shall be calculated or estimated by reference to the published selling price on the day in question.

Here “published selling price” means the lowest selling price published on the date on which the payment in question is made, and where no such price is published on that date, it means the lowest selling price published on the last previous date on which such a price was published.

Section 4 Conferment of a beneficial interest in an option to acquire an asset falling within Part IV of Schedule 1ZC

The amount of earnings which is comprised in a payment by way of the conferment of a beneficial interest in an option to acquire any asset falling within Part IV of Schedule 1ZC shall be calculated or estimated by reference to the amount which would be comprised in accordance with paragraph 2, or, if paragraph 3, 5 or 6 would apply in accordance with that paragraph, in a payment by way of the conferment of a beneficial interest—

(a) in the asset which may be acquired by the exercise of the option; or

(b) where that asset (the first asset) may be exchanged for another asset (the second asset) and the value of the beneficial interest in the second asset is greater than that in the first, in that second asset,

on the day on which the beneficial interest in the option is conferred.

The amount shall be reduced by the amount or value, or, if variable, the least amount or value, of the consideration for which the asset may be so acquired.

Section 5 Readily convertible assets

(1) The amount of earnings which is comprised in—

(a) any payment by way of the conferment of a beneficial interest in any asset falling within Part III of Schedule 1ZC;

(b) any payment by way of the conferment of a beneficial interest in any asset falling within Part IV of Schedule 1ZC which is a readily convertible asset;

(c) any payment by way of—

(i) a voucher falling within paragraph 12 of Part IV of that Schedule,

(ii) a non-cash voucher not falling within Part V (whether or not also falling within paragraph 12 of Part IV of that Schedule) which is capable of being exchanged for a readily convertible asset,

and which is to be taken into account in calculating a person’s earnings, shall be calculated in accordance with sub-paragraphs (2) to (5).

(2) In the case of an asset falling within paragraph 1 of Part III of Schedule 1ZC, the amount is the best estimate that can reasonably be made of the amount of income likely to be chargeable to tax under Schedule E in respect of the provision of the asset.

(3) In the case of an asset falling within paragraph 2 of Part III of Schedule 1ZC, the amount is the best estimate that can reasonably be made of the amount of income likely to be chargeable to tax under Schedule E in respect of the enhancement of its value.

(4) In the case of a voucher falling within—

(a) sub-paragraph (1)(c); or

(b) paragraph 3 of Part III of Schedule 1ZC,

the amount is the best estimate that can reasonably be made of the amount of income likely to be chargeable to tax under Schedule E in respect of the provision of any asset for which the voucher is capable of being exchanged.

(5) In the case of an asset falling within sub-paragraph (1)(b), the amount is the best estimate that can reasonably be made of the amount of income likely to be chargeable to tax under Schedule E in respect of the provision of the asset.

Section 6 Assets not readily convertible: beneficial interests in alcoholic liquor on which duty has not been paid, gemstones and certain vouchers and non-cash vouchers

The amount of earnings comprised in any payment by way of the conferment of a beneficial interest in—

(a) an asset which—

(i) falls within paragraph 9 or 10 of Part IV of Schedule 1ZC (payments by way of alcoholic liquor on which duty has not been paid or by way of gemstones not to be disregarded as payments in kind), and

(ii) is not a readily convertible asset;

(b) a voucher which falls within paragraph 12 of Part IV of that Schedule; or

(c) a non-cash voucher not excluded by virtue of Part V of that Schedule and which falls within paragraph 12 of Part IV of that Schedule (assets not to be disregarded as payments in kind);

shall be calculated or estimated on the basis of the cost of the asset in question.

Here “the cost of the asset” in relation to any voucher includes the cost of any asset for which that voucher is capable of being exchanged.

Section 7 Conditional interest in shares

(1) The amount of earnings comprised in any payment by way of the conferment of a conditional interest in shares, falling to be taken into account in calculating a person’s earnings, shall be the difference between—

(a) the market value of that person’s interest immediately after—

(i) the interest ceases to be only conditional, or

(ii) if earlier, the sale or other disposal of that interest; and

(b) the amount or value of the consideration given by that person for that interest together with any amounts which have previously been included in his earnings for the purpose of assessment of earnings-related contributions in respect of his acquisition of that interest.

The difference shall be calculated on the basis of the best estimate that can reasonably be made.

(2) In this paragraph—

(a) “market value” has the meaning given in section 140A(6) of the Taxes Act ; and

(b) the amount or value of the consideration given shall be calculated in accordance with section 140B of that Act as it would be for the purposes of section 140A.

Section 8 Convertible interest in shares

(1) The amount of earnings comprised in any payment by way of the conferment of a beneficial interest in convertible shares and which falls to be taken into account in calculating a person’s earnings shall be the gain from their conversion.

The amount of the gain shall be calculated on the basis of the best estimate that can reasonably be made.

(2) In this paragraph the gain from the conversion of convertible shares is the amount found by the formula—

Here—

M is the market value at the time of conversion of the shares into which the convertible shares are converted.

For this purpose “market value” has the same meaning as in section 140F(3) of the Taxes Act .

S is the amount or value of any consideration given for the convertible shares.

For this purpose that amount or value shall be calculated in accordance with section 140E of the Taxes Act.

C is the amount or value of any consideration given for the conversion in question.

P is the amount (if any) which has previously been included in that person’s earnings for the purpose of assessment of his earnings-related contributions, in respect of his acquisition of the interest in the convertible shares.

E is the amount of any gain from an earlier conversion, if the convertible shares were acquired through a series of conversions, where that earlier conversion gave rise to a liability for earnings-related contributions, to the extent that that amount is not included in P .

For this purpose a conversion gives rise to a liability for earnings-related contributions if it—

gives rise to a gain treated as earnings under regulation 17A(3) of these Regulations; or

would have given rise to such a gain but for the fact that the market value of the shares at the time of the conversion of the shares into which the convertible shares were converted did not exceed the amount produced by the addition of the values for S, C, P and E applicable at the time of the relevant conversion.

Section 9 Assignment or release of right to acquire shares where neither right nor shares readily convertible

(1) The amount of earnings comprised in any payment by way of a gain which a person realises by the assignment or release of a right to acquire shares in a body corporate—

(a) obtained by that person as a director or employee of that or any other body corporate where neither that right nor those shares are readily convertible assets; and

(b) falling to be taken into account in calculating a person’s earnings;

shall be calculated on the basis set out in sub-paragraph (2).

(2) The basis is the best estimate that can reasonably be made of the difference between—

(a) the amount or value of the consideration for that assignment or release; and

(b) the amount or value of the consideration (if any) given for the grant of the right.

In making the estimate, a just apportionment shall be made of any entire consideration given for the grant of the right to acquire those shares and other shares or otherwise for the grant of the right to acquire those shares and for something else besides.

(3) This paragraph is subject to paragraph 10.

Section 10 Assignment or release of a right, acquired as director or employee before 6th April 1999, to acquire shares where neither right nor shares readily convertible

(1) The amount of earnings comprised in any payment by way of a gain which a person realises by the assignment or release of a right to acquire shares in a body corporate (“the first body corporate”), obtained by that person before 6th April 1999 as a director or employee of that or any other body corporate where neither that right nor those shares are readily convertible assets, where—

(a) a subsequent right forms all or part of the consideration given for the assignment or release of the first right; and

(b) that subsequent right is—

(i) a right to acquire shares in the first body corporate or any other body corporate,

(ii) not treated as consideration for the assignment or release of the first right by virtue of section 136(1) of the Taxes Act, and

(iii) acquired at a total discount on the total market value which is substantially greater than the total discount on the total market value of the first right at the time of its assignment or release,

shall be calculated on the basis set out in sub-paragraph (2).

(2) The basis is the best estimate that can reasonably be made of the difference between the total discount on the subsequent right and the total discount on the first right.

Section 11 Exercise of right to acquire shares gained as director or employee before 6th April 1999

(1) The amount of earnings comprised in any payment by way of a gain which a person realises by the exercise of a right to acquire shares in a body corporate obtained by that person as a director or employee of that or any other body corporate, where—

(a) that right—

(i) formed all or part of the consideration given for the assignment or release of a right which was obtained before 6th April 1999 (“the first right”) to acquire shares in a body corporate (“the first body corporate”),

(ii) is a right to acquire shares in the first body corporate or any other body corporate, and

(iii) was not treated as consideration for the assignment or release of the first right by virtue of section 136(1) of the Taxes Act; and

(b) at the time of its acquisition, the total market value of the subsequent right was not similar to the total market value of the first right immediately before its assignment or release;

and which falls to be taken into account in calculating a person’s earnings, shall be calculated or estimated in accordance with sub-paragraph (2).

(2) The basis of calculating or estimating the amount of a gain realised by the exercise at any time of a subsequent right shall be the best estimate that can reasonably be made of such part of that gain as relates to the difference between—

(a) the amount that a person might reasonably expect to obtain from a sale in the open market at the time that the shares were acquired pursuant to that subsequent right, less the amount or value of the consideration (if any) given for those shares and the grant of that right; and

(b) the amount that a person might reasonably expect to obtain from a sale in the open market of the shares which were the subject of the first right at the time of its assignment or release, less the amount or value of the consideration (if any) given for those shares and the grant of that right.

(3) For the purposes of sub-paragraph (2) “gain” means the amount realised by the exercise of a subsequent right, less any amount which has previously been included in that person’s earnings for the purposes of assessing his earnings-related contributions in respect of his acquisition, assignment or release of the first right.

In making the estimate, a just apportionment shall be made of any entire consideration given for the grant of the right to acquire those shares and other shares or otherwise for the grant of the right to acquire those shares and for something else besides.

Section 12 Interpretation of paragraphs 9, 10 and 11

For the purposes of paragraphs 9, 10 and 11—

(a) “the total market value” means the price which the shares that are the subject of the right in question might reasonably be expected to fetch on sale in the open market;

(b) the total market value of the subsequent right is similar to the total market value of the first right if it is not substantially greater than the first right;

(c) “total discount” means the difference between the total value of the exercise price of the shares that are the subject of the right in question and the total market value of that right;

(d) neither the consideration given for the grant of the right nor any entire consideration shall be taken to include the performance of any duties of or in connection with the office or employment by reason of which the right was granted and no part of the amount or value of the consideration given for the grant shall be deducted more than once;

(e) “shares”, so far as the context permits, includes stock; and

(f) “body corporate” includes—

(i) a body corporate constituted under the law of a country or territory outside the United Kingdom, and

(ii) an unincorporated association wherever constituted.

Section 13 Apportionment of a payment from a retirement benefits scheme for benefit of two or more people

(1) If, pursuant to a retirement benefits scheme, a payment is made with a view to providing any benefits under such a scheme in relation to more than one person, the amount of earnings which is comprised in that payment shall be calculated or estimated on the basis set out in whichever of sub-paragraphs (2) or (3) applies.

(2) If the separate benefits to be provided to each of the people referred to in sub-paragraph (1) are known at the time when the payment is made, the basis is that of the separate payments which would have had to have been paid to secure the benefits.

(3) In any other case, the amount of the payment shall be apportioned equally between all the persons in respect of whose earnings the payment is to be taken into account.

Section 14 Valuation of non-cash vouchers

(1) The amount of earnings comprised in any payment by way of a non-cash voucher which is not otherwise disregarded by these Regulations and which falls to be taken into account in calculating an employed earner’s earnings shall be calculated or estimated on the basis set out in sub-paragraph (2).

(2) The basis is that of an amount equal to the expense incurred (“the chargeable expense”)—

(a) by the person at whose cost the voucher and the money, goods or services, for which it is capable of being exchanged, are provided;

(b) in, or in connection with, that provision,

and any money, goods or services obtained by the employed earner or any other person in exchange for the voucher shall be disregarded.

This is subject to the following qualification.

(3) For the purpose of sub-paragraph (2)—

(a) the chargeable expense shall be reduced by any part of it which the employed earner makes good to the person incurring it; and

(b) in the case of a non-cash voucher which can be exchanged only for a meal which exceeds the limit specified in Inland Revenue Extra-Statutory Concession A2 (luncheon vouchers) as published at 1st September 2000, the chargeable expense shall be reduced by the amount (if any) by which it exceeds the face value of the voucher.

Section 15 Apportionment of earnings comprised in a cash or non-cash voucher provided for benefit of two or more employed earners

(1) The amount of earnings comprised in any payment by way of a cash voucher or a non-cash voucher provided for the benefit of two or more employed earners and which falls to be taken into account in calculating the earnings of each of those earners shall be calculated or estimated on the basis set out in whichever of sub-paragraphs (2) or (3) applies.

(2) If the respective proportion of the benefit of the voucher to which each of those earners is entitled is known at the time of the payment, the basis is that of a separate payment equal to that proportion.

(3) In any case where the respective proportions are not known at the time of the payment, the basis is equal apportionment between all those earners.

(4) In this paragraph—

(a) “chargeable expense” has the same meaning, and is calculated in the same way, as in paragraph 14; and

(b) if an employed earner makes good any part of the chargeable expense to the person incurring it, that chargeable expense in relation to that employed earner shall be reduced by that part.

Section 1 Introduction

(1) This Schedule contains provisions about payments which are to be disregarded in the calculation of earnings for the purposes of earnings-related contributions.

(2) Part II contains provisions about the treatment of payments in kind.

(3) Parts III and IV specify payments by way of assets which are not to be disregarded by virtue of paragraph 1 of Part II.

(4) Part V specifies non-cash vouchers which are to be disregarded by virtue of paragraph 1 of Part II.

(5) In calculating earnings there are also to be disregarded—

(a) the pensions and pension contributions specified in Part VI;

(b) the payments in respect of training and similar courses specified in Part VII;

(c) the travelling, relocation and overseas expenses specified in Part VIII;

(d) the share incentives specified in Part IX; and

(e) the miscellaneous payments specified in Part X.

Section 1 Certain payments in kind to be disregarded

A payment in kind, or by way of the provision of services, board and lodging or other facilities is to be disregarded in the calculation of earnings.

This is subject to paragraph 2 and to any provision about a payment in kind of a particular description or in particular circumstances in any other Part of this Schedule.

Section 1

A readily convertible asset.

For the purposes of this paragraph, subsections (3A) to (6) of section 203F of the Taxes Act (PAYE: readily convertible assets) apply as they apply for the purposes of that section.

Section 1 Shares and stock

Shares and stock in the share capital of a company.

Here “company” includes—

any body corporate constituted under the law of, or of any part of, the United Kingdom or of any other country or territory and also any unincorporated body constituted under the law of a country or territory outside the United Kingdom; and

any body incorporated under the law of, or of any part of, the United Kingdom relating to a building society within the meaning of section 119(1) of the Building Societies Act 1986 or an industrial and provident society registered, or deemed to be registered, under the Industrial and Provident Societies Act 1965 or the Industrial and Provident Societies Act (Northern Ireland) 1969 .

Section 1

(1) Subject to sub-paragraph (2), a non-cash voucher provided, to or for the benefit of the employed earner, by the employer or any other person on his behalf is to be disregarded in the calculation of an employed earner’s earnings by virtue of paragraph 1 of Part II only if it falls within any of paragraphs 2 to 8.

(2) A non-cash voucher may also be disregarded in the circumstances specified in paragraph 4 of Part X.

Section 1 Pension payments and pension contributions to be disregarded

A payment by way of a pension is disregarded in the calculation of an employed earner’s earnings, as are the payments mentioned in paragraphs 2 to 7.

In this Part “the Board” means the Commissioners of Inland Revenue.

Section 1 Payments in respect of training and similar expenses disregarded

The training payments and vouchers mentioned in this Part are disregarded in the calculation of an employed earner’s earnings.

Section 1 Travelling, relocation and incidental expenses disregarded

The travelling, relocation and other expenses and allowances mentioned in this Part are disregarded in the calculation of an employed earner’s earnings.

Section 1 Certain payments by way of shares, interests in shares and gains arising from them disregarded

(1) Payments by way of—

(a) shares;

(b) conditional interests in shares; and

(c) other rights in or over shares;

respectively mentioned in this Part are disregarded in the calculation of an employed earner’s earnings.

(2) For the purposes of paragraphs 13, 15 and 16—

(a) “body corporate” includes—

(i) a body corporate constituted under the law of a country or territory outside the United Kingdom, and

(ii) an unincorporated association wherever constituted;

(b) “total discount” means the difference between the total value of the exercise price of the shares that are subject to the right in question and the total market value of that right;

(c) “total market value” means the price which the shares that are subject to the right in question might reasonably be able to fetch in the open market; and

(d) the total market value of the subsequent right is similar to the total market value of the first right if it is not substantially greater than the first right.

Section 1 Other miscellaneous payments to be disregarded

(1) The payments listed in paragraphs 2 to 14 are disregarded in the calculation of earnings.

(2) Paragraph 4 contains additional rules about the way in which the components of a payment by way of expenses incidental to a qualifying absence from home are to be treated for the purpose of earnings-related contributions if the permitted maximum is exceeded.

Section 2 Interpretation

(1) In this Schedule, unless the context otherwise requires—

(a) a reference to a numbered Part is a reference to the Part of this Schedule which bears that number;

(b) a reference in a Part to a numbered paragraph is a reference to the paragraph of that Part which bears that number; and

(c) a reference in a paragraph to a lettered or numbered sub-paragraph is a reference to the sub-paragraph of that paragraph which bears that letter or number.

(2) In this Schedule—

“the Contributions and Benefits Act ” means the Social Security Contributions and Benefits Act 1992 ;

“the Taxes Act” means the Income and Corporation Taxes Act 1988 ; and

“Schedule E” means the Schedule referred to as Schedule E in the Taxes Act.

Section 2 Payments by way of assets not to be disregarded

(1) Payments falling within paragraph 1 do not include any payment by way of—

(a) the conferment of any beneficial interest in—

(i) any asset mentioned in Part III or Part IV,

(ii) any contract, the effecting and carrying out of which constitutes long term business falling within Class I (life and annuity business), Class III (linked long term business) or Class VI (capital redemption business) specified in Schedule 1 to the Insurance Companies Act 1982 ;

(b) a non-cash voucher not of a description mentioned in Part V or to which paragraph 4 of Part X applies.

(2) Sub-paragraph (1)(a)(i) is subject to the qualification that an asset, which falls within either Part III or Part IV, may nevertheless be disregarded under paragraph 1 if it would be disregarded for the purposes of income tax under Inland Revenue Extra-Statutory Concession A22 (long service awards), as published at 1st September 2000.

(3) For the purposes of sub-paragraph (1)(a)(ii), if the provisions of a contract of insurance are such that the effecting and carrying out of the contract constitutes—

(a) both long term business within the meaning of the Insurance Companies Act 1982 and general business within the meaning of that Act; or

(b) by virtue of section 1(3) of that Act, long term business notwithstanding the inclusion of subsidiary general business terms,

the effecting and carrying out of that contract shall be treated as constituting long term business.

Section 2

An asset which, in accordance with the provisions of section 203FA of the Taxes Act (PAYE: enhancing the value of an asset) , would be treated as a readily convertible asset for the purposes of section 203F of that Act.

Section 2 Certain debentures and other securities for loans

Debentures, including debenture stock, loan stock, bonds, certificates of deposit and other instruments creating or acknowledging indebtedness which are not instruments falling within paragraph 3.

Section 2

A non-cash voucher which is not treated as an emolument from employment for the purposes of section 141(1) of the Taxes Act (charge to tax in respect of non-cash vouchers) by virtue of subsection (6) of that section (exemptions for employees of certain passenger transport undertakings).

This paragraph applies only in the case of an employee whose earnings from the employment in question are less than £8,500, calculated in accordance with the Taxes Act.

Section 2 Personal pension contributions by employers

A payment by way of an employer’s contribution towards a personal pension which, by virtue of section 643(1) of the Taxes Act (employers' contributions under personal pension arrangements) , is not to be regarded as an emolument of the employment chargeable to tax under Schedule E.

Section 2 Work-related training

A payment of, or contribution towards, expenditure incurred in providing work-related training which, by virtue of sections 200B, 200C and 200D of the Taxes Act (work-related training) , is not to be taken as an emolument of the office or employment in connection with which it is provided.

Section 2 Relocation expenses

(1) A payment of, or contribution towards, expenses reasonably incurred by a person in relation to a change of residence in connection with the commencement of, or an alteration in, the duties of the person’s employment or the place where those duties are normally to be performed is disregarded if the conditions in sub-paragraphs (2) to (6) are met.

(2) The first condition is that—

(a) the payment or contribution—

(i) is not, by virtue of Schedule 11A to the Taxes Act (removal expenses and benefits) , regarded as an emolument of the employment for any purpose of Case I or Case II of Schedule E, or

(ii) would not have been so regarded, but is in fact disregarded for that purpose by virtue of another provision of the Taxes Act; or

(b) the person concerned commenced performance of the duties, or altered duties, of his employment at the place, or the altered place, of their performance before 6th April 1998.

(3) The second condition is that the change of residence must result from—

(a) the employee becoming employed by an employer;

(b) an alteration of the duties of the employee’s employment (where his employer remains the same); or

(c) an alteration of the place where the employee is normally to perform the duties of his employment (where both the employer and the duties which the employee is to perform remain the same).

(4) The third condition is that the change of residence must be made wholly or mainly to allow the employee to have his residence within a reasonable daily travelling distance of—

(a) the place where he performs, or is to perform, the duties of his employment (in a case falling within paragraph (3)(a));

(b) the place where he performs, or is to perform, the new duties of his employment (in a case falling within paragraph (3)(b)); or

(c) the new place where he performs, or is to perform, the duties of his employment (in a case falling within paragraph (3)(c)).

References in this sub-paragraph and sub-paragraph (5) to the place where the employee performs, or is to perform, the duties of his employment are references to the place where he normally performs, or is normally to perform, the duties of the employment.

(5) The fourth condition is that the employee’s former residence must not be within a reasonable daily travelling distance of the place where the employee performs or is to perform the duties of the employment.

(6) In a case to which sub-paragraph (2)(b) applies, expenditure incurred in pursuance of a contract or agreement entered into before 6th April 1998 does not, in the case of a contract or agreement varied at any time on or after that date, include so much of the expenditure incurred under that contract or agreement which would not have been incurred, or exceeds the amount of expenditure that would have been reasonably incurred, if that contract or agreement had not been so varied.

(7) For the purposes of this paragraph, Schedule 11A to the Taxes Act shall be read as if paragraphs 3(3), 4(3), 6 and 24 were omitted.

Section 2 Shares in secondary contributor or associated body

(1) A payment by way of shares where such shares—

(a) are not readily convertible assets; and

(b) form part of the ordinary share capital of—

(i) the secondary contributor,

(ii) a company which has control of the secondary contributor, or

(iii) a company which either is, or has control of, a body corporate which is a member of a consortium owning either that secondary contributor or a body corporate having control of that secondary contributor.

(2) In this paragraph—

(a) “body corporate” includes—

(i) a body corporate constituted under the law of a country or territory outside the United Kingdom, and

(ii) an unincorporated association, wherever constituted,

but does not include a partnership, a local authority within the meaning of section 842A of the Taxes Act or a local authority association within the meaning of section 519 of that Act ;

(b) a body corporate (“A”) is a member of a consortium owning another body corporate (“B”) if—

(i) A is one of a number of such bodies which between them beneficially own not less than ¾ of B’s ordinary share capital, and

(ii) each of the bodies corporate owns not less than 1/20 of B’s ordinary share capital;

(c) “company” means a body corporate having a share capital;

(d) “control” in relation to a body corporate means the power of a person to secure—

(i) by means of the holding of the shares or the possession of voting power in, or in relation to, that or any other body corporate,

(ii) by virtue of any powers conferred by the articles of association or other document regulating that or any other body corporate,

that the affairs of the first-mentioned body corporate are conducted in accordance with the wishes of that person;

(e) “ordinary share capital” in relation to a company means all the company’s issued share capital (however described), other than capital the holders of which have a right to a dividend at a fixed rate but have no other right to share in the profits of the company.

(3) In this paragraph and paragraph 3, “shares” includes stock.

Section 2 Payments on account of sums already included in the calculation of earnings

A payment on account of a person’s earnings in respect of his employment as an employed earner which comprises, or represents and does not exceed sums which have previously been included in his earnings for the purpose of his assessment of earnings-related contributions.

Section 3

Any voucher, stamp or similar document—

(a) whether used singularly or together with other such vouchers, stamps or documents; and

(b) which is capable of being exchanged for an asset falling within paragraph 1 or 2.

Section 3 Loan stock of public and local authorities

Loan stock, bonds and other instruments creating or acknowledging indebtedness issued by or on behalf of a government, local authority or public authority.

Here—

“government” means the government of the United Kingdom, of Northern Ireland, or of any country or territory outside the United Kingdom;

“local authority” means a local authority in the United Kingdom or elsewhere, and, in respect of a local authority in the United Kingdom, it has the meaning given in section 842A of the Taxes Act ; and

“public authority” means any international organisation the members of which include the United Kingdom or another member State.

Section 3

A non-cash voucher which is not treated as an emolument from the employment for the purposes of section 141(1) of the Taxes Act by virtue of subsection (6A) of that section (exemption vouchers for car parking places provided at or near place of employment) .

Section 49(1) of the Finance Act 1999 applies for the construction of the reference to section 141(6A) of the Taxes Act in this paragraph.