Benefits Code II: Not Low Paid Employees

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them by the employer. If the benefit is provided by someone other than the employer,⁴² so that the deeming provision does not apply, chapter 10 will apply only if the benefit is provided ‘by reason of the employment’. This test may be satisfied if the employment is not the sole or even the main cause but only an operative cause (ie a condition of benefit). The problem with this is that the test for chapter 10 is then different from the general test of causation for section 62.⁴³

17A.3.2    Case-Law Limits on Chapter 10

Although section 201 talks simply in terms of the provision of certain benefits, case law imposes some limits.

1. E, the director or employee, must accept or acquiesce in the provision of the benefit. Therefore, Lord Reid in Rendell v Went⁴⁴ considered that it was important that the director knew and accepted what was being done on his behalf even though he may not have realised how much it was costing. Lord Reid would express no opinion on the case of a company spending a large sum of money without the director’s knowledge to procure an unwanted benefit.
       E will usually be aware of the benefit and can avoid tax by a disclaimer.⁴⁵ However, the legislation also applies to benefits conferred on members of E’s spouse, family or household, an expression replacing ‘servants, dependants or guests’.⁴⁶

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