|
Benefits Code II: Not Low Paid Employees |
5 |
17A.1.3.2 Associated Employments |
An employer may not avoid these rules by dividing up employees’ functions into different employments.21 Similar rules apply if the second employment is with a controlled company. A director (other than a full-time working director without a material interest) of one controlled company, who is also an employee of another, is subject to these rules in respect of both situations. |
17A.2 Chapter 3: Payments for Expenses and Expense Allowances22 |
Under ITEPA sections 70–72 (ex TA 1988, section 153) any sum paid to an employee23 and paid by reason of the employment24 ‘in respect of expenses’ is, unless otherwise chargeable to tax, to be treated as income of the director or employee.25 The section applies not only to expense allowances but also to reimbursement of expenses actually incurred since here, too, there is payment in respect of expenses.26 The only expenses not caught are those which the employer meets directly. The recipient may, however, deduct sums actually expended if they satisfy the tests laid down in part 5 chapter 2.27 ITEPA applies to all sums paid in a tax year including sums paid before or after the period of actual employment.28 |