- Latest available (Revised)
- Point in Time (05/12/2005)
- Original (As enacted)
Version Superseded: 06/04/2006
Point in time view as at 05/12/2005.
Income Tax (Earnings and Pensions) Act 2003, Chapter 1 is up to date with all changes known to be in force on or before 12 June 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
Changes and effects yet to be applied by the editorial team are only applicable when viewing the latest version or prospective version of legislation. They are therefore not accessible when viewing legislation as at a specific point in time. To view the ‘Changes to Legislation’ information for this provision return to the latest version view using the options provided in the ‘What Version’ box above.
(1)A sum paid by an employer—
(a)in accordance with a non-approved retirement benefits scheme, and
(b)with a view to the provision of relevant benefits for or in respect of an employee of the employer,
counts as employment income of the employee for the relevant tax year.
(2)The “relevant tax year” is the tax year in which the sum is paid.
(3)Subsection (1) does not apply if or to the extent that the sum is chargeable to income tax as the employee’s income apart from this section.
(4)But if, apart from this section, the payment of the sum would be a payment to which Chapter 3 of this Part (payments and benefits on termination of employment etc.) would apply, subsection (1) applies to the sum (and accordingly that Chapter does not apply to it).
(5)In this Chapter—
(a)“employee” includes a person who is to be or has been an employee,
(b)section 5(1) (application to offices) does not apply, but “employee”, in relation to a company, includes any officer or director of the company and any other person taking part in the management of the affairs of the company,
(c)“employer” and “employment” have meanings corresponding to the meaning of “employee” given by paragraphs (a) and (b),
(d)“director” has the meaning given by section 612(1) of ICTA, and
(e)“relevant benefits” has the meaning given by that section, and section 612(2) of ICTA applies to references in this Chapter to the provision of relevant benefits as it applies to such references in Chapter 1 of Part 14 of ICTA.
(6)For the purposes of this Chapter benefits are provided in respect of an employee if they are provided for the employee’s spouse [F1or civil partner] , widow or widower [F2or surviving civil partner] , children, dependants or personal representatives.
(7)Any liability to tax arising by virtue of this section is subject to the reliefs given under—
(a)section 392 (relief where no benefits are paid or payable), and
(b)section 266A of ICTA (life assurance premiums paid by employer).
Textual Amendments
F1Words in s. 386(6) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 149(a)
F2Words in s. 386(6) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 149(b)
(1)In this Chapter “retirement benefits scheme” has the meaning given by section 611 of ICTA.
(2)For the purposes of this Chapter, a retirement benefits scheme is “non-approved” unless it is—
(a)an approved scheme,
(b)a relevant statutory scheme, or
(c)a scheme set up by a government outside the United Kingdom for the benefit of its employees or primarily for their benefit.
(3)In this section—
“approved scheme” has the meaning given by section 612(1) of ICTA, and
“relevant statutory scheme” has the meaning given by section 611A of ICTA.
(1)If a sum within section 386 is paid for or in respect of two or more employees, part of it is treated as paid in respect of each of them.
(2)The amount treated as paid in respect of each employee is—
where—
A is the sum paid,
B is the amount which would have had to be paid to secure the benefits to be provided in respect of the employee in question, and
C is the total amount which would have had to be paid to secure the benefits to be provided in respect of all the employees if separate payments had been made in the case of each of them.
Modifications etc. (not altering text)
C1S. 388 applied by 1988 c. 1, s. 266A(5) (as inserted (6.4.2003 with effect in accordance with s. 723(1)(a)(b) of the amending Act) by Income Tax (Earnings and Pensions) Act 2003 (c. 1), s. 723, Sch. 6 para. 36 (with Sch. 7))
Section 386 does not apply if in the tax year in which the sum is paid the earnings from the employment are not (or would not have been if there were any) general earnings to which any of the following provisions applies—
(a)section 15 (employee resident, ordinarily resident and domiciled in UK),
(b)section 21 (employee resident and ordinarily resident, but not domiciled in UK),
(c)section 25 (employee resident but not ordinarily resident in UK),
(d)section 27 (UK-based earnings for year when employee not resident in UK).]
Textual Amendments
F3S. 389 substituted (with effect in accordance with Sch. 17 para. 2(2) of the amending Act) by Finance Act 2004 (c. 12), Sch. 17 para. 2(1)
Section 386 does not apply if—
(a)the employee is not domiciled in the United Kingdom in the tax year in which the sum is paid,
(b)the employment is with a foreign employer, and
(c)on a claim made by the employee [F4the Commissioners for Her Majesty’s Revenue and Customs] are satisfied that the scheme corresponds to a scheme within section 387(2)(a), (b) or (c).
Textual Amendments
F4Words in Act substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 102(2); S.I. 2005/1126, art. 2(2)(h)
Section 386 does not apply if—
(a)the sum is paid in a period that is an eligible period in relation to the employee’s employment for the purposes of Chapter 6 of Part 5 (deductions from seafarers' earnings) (see section 378(2)), and
(b)a deduction is allowed under section 378 from the employee’s earnings that are attributable to that period.
(1)An application for relief may be made to [F5an officer of Revenue and Customs] if—
(a)a sum is charged to tax by virtue of section 386 in respect of the provision of any benefits,
(b)no payment in respect of, or in substitution for, the benefits has been made, and
(c)an event occurs by reason of which no such payment will be made.
(2)The application must be made within 6 years from the time when the event occurs.
(3)The application must be made by the employee or, if the employee has died, the employee’s personal representatives.
(4)If [F5an officer of Revenue and Customs] [F6is satisfied] that the conditions in subsection (1) are met in relation to the whole sum, [F7the officer] must give relief in respect of tax on it by repayment or otherwise as appropriate, unless subsection (6) applies.
(5)If [F5an officer of Revenue and Customs] [F8is satisfied] that the conditions in subsection (1) are met in relation to part of the sum, [F7the officer] may give such relief in respect of tax on it as is just and reasonable, unless subsection (6) applies.
(6)This subsection applies if—
(a)the reason why no payment has been made in respect of, or in substitution for, the benefits, or
(b)the event by reason of which there will be no such payment,
is a reduction or cancellation of the employee’s rights in respect of the benefits, or part of the benefits, as a consequence of a pension sharing order or provision.
(7)In subsection (6) “pension sharing order or provision” means any such order or provision as is mentioned in—
(a)section 28(1) of WRPA 1999 (rights under pension sharing arrangements), or
(b)Article 25(1) of WRP(NI)O 1999 (provision for Northern Ireland corresponding to section 28(1) of WRPA 1999).
Textual Amendments
F5Words in Act substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 102(1); S.I. 2005/1126, art. 2(2)(h)
F6Words in s. 392(4) substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 113; S.I. 2005/1126, art. 2(2)(h)
F7Words in s. 392(4)(5) substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 103(1)(h); S.I. 2005/1126, art. 2(2)(h)
F8Words in s. 392(5) substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 113; S.I. 2005/1126, art. 2(2)(h)
The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act you have selected contains over 200 provisions and might take some time to download.
Would you like to continue?
The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download.
Would you like to continue?
The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.
Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.
Point in Time: This becomes available after navigating to view revised legislation as it stood at a certain point in time via Advanced Features > Show Timeline of Changes or via a point in time advanced search.
Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.
Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.
Text created by the government department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Public Acts except Appropriation, Consolidated Fund, Finance and Consolidation Acts.
Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:
This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.
Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:
Click 'View More' or select 'More Resources' tab for additional information including: