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Benefits Code II: Not Low Paid Employees |
7 |
The previous wording covered (TA 1988, section 154) accommodation (other than living accommodation), entertainment, domestic or other services or other benefits or facilities of whatsoever nature. This wide-ranging provision even taxes prizes for passing examinations.32 This will still be so. There seems to be no reason in principle why the section should be confined to benefits in kind; it can also apply to cash. |
17A.3.1.1 Extent of Charge |
Tax is charged on the ‘cash equivalent’ of the benefit,33 usually the cost of the benefit to the person providing it.34 |
17A.3.1.2 Making Good |
Chapter 10 (ex section 154) does not apply if (or to the extent that) E, the employee, has ‘made good’ the expense to R, the employer.35 An expense may be made good by E by the payment of cash or by providing some other consideration (but not by providing services under the contract of employment).36 |
17A.3.1.3 Not Otherwise Chargeable or Exempt |
Chapter 10 does not apply if one of the other provisions of the benefits code applies or would do so but for an exception or it comes within section 221 (sickness); these are called excluded benefits.37 The relationship with the ‘earnings’ rule in section 62 is governed by section 64. This represents either a clarification of or a change to the old law. |