C1Part 4Employment income: exemptions
F1CHAPTER 7AExemptions: amounts which would otherwise be deductible
Pt. 4 Ch. 7A inserted (with effect in accordance with s. 11(2) of the amending Act) by Finance Act 2015 (c. 11), s. 11(1)
289EAnti-avoidance
1
This section applies if conditions A to C are met.
2
Condition A is that, pursuant to arrangements, an amount—
a
is paid or reimbursed to an employee in respect of expenses, or
b
is treated as earnings of an employee as a result of the provision of a benefit,
which, in the absence of this section, would have been exempt from income tax.
3
Condition B is that, in the absence of those arrangements, the employee would have received a greater amount of general earnings or specific employment income in respect of which—
a
tax would have been chargeable, or
b
national insurance contributions would have been payable (whether by the employee or another person).
4
Condition C is that the main purpose, or one of the main purposes, of the arrangements is the avoidance of tax or national insurance contributions.
5
If this section applies—
a
the exemption conferred by section 289A does not apply in respect of the amount paid or reimbursed as mentioned in subsection (2)(a), and
b
the exemption conferred by section 289D does not apply in respect of the amount treated as earnings as mentioned in subsection (2)(b).
6
In this section “arrangements” includes any scheme, transaction or series of transactions, agreement or understanding, whether or not legally enforceable.
Pt. 4 modified (10.6.2021) by Finance Act 2021 (c. 26), s. 26(3)