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18A.3.4.3 Payroll Giving |
In a major departure from orthodox tax theory, an employee is allowed to deduct from his pre—tax pay contributions to charity under a payroll deduction scheme. There is now no maximum amount. The scheme has effect both for employment income (schedule E) and for PAYE.113 FA 2000 not only removes the limits on the amounts given by payroll giving (£1,200 in 1999–2000) but also provides a temporary 10% enhancement of the benefit to the charity.114 This enhancement is extended to 2003–2004 by FA 2003 section 146. |
18A.3.4.4 Liability Insurance Premiums and Uninsured Liabilities |
ITEPA sections 346–350 (ex TA 1988, section 201AA) allows a deduction for money spent either on discharging a qualifying liability together with associated costs and expenses, or on a premium for a qualifying contract of insurance relating to an indemnity against a qualifying liability. The expense must be met out of the emoluments of the office or employment. The effect is to remove liability on the employee where these costs are met by the employer and to give relief for the employee’s own expenditure—including expenditure up to 6 years after the year in which the employment ends.115 |
18A.3.4.5 Post—Employment |
Post—employment deductions may be set against total income.116 The relief may, like post—cessation business expenses, be set against CGT.117 The burden must fall on the employee rather than the employer. |