4 |
share capital or, if the company is a close company, more than 5% of assets could be distributed to A on a notional winding-up.16 |
| 17A.1.3 Calculating the £8,500 Threshold17 |
In computing E’s emoluments for the £8,500 threshold, sums treated as taxable by TA 1988, sections 153 and 154 must be included;18 this is to prevent avoidance by means of a low salary and large expenses or benefits in kind. |
17A.1.3.1 Deductions |
Perhaps surprisingly there is no deduction in making this computation for most of the expenses allowable under part 5 chapter 2 (sections 333–360); the only exceptions are sections 346 (liability and insurance payments), 352 (agency fees) and 355 (corresponding payments for non domiciled employees with foreign employers). This is despite the fact that an inspector may give a notice of nil liability19 in respect of a benefit or allowance when satisfied that no extra charge to tax would arise. Such notices, however, are not issued where the effect would be to take the employee below the £8,500 threshold. An expense met directly by the employer will not be taken into account. ITEPA does allow the exclusion of sums which are brought in and then taken out by part 5 chapters 4 and 5 and also of approved pension contributions, certain capital allowances, and contributions under approved payroll giving schemes.20 |