Following the decision in Ball v Johnson (47TC155) examination awards paid by employers to employees for passing a recognised examination are not taxable as earnings within Section 62 ITEPA 2003 (see EIM00515) where all the following conditions are satisfied:
For directors and employees who are
not in lower paid employment the award is treated
as earnings by Section 203 ITEPA 2003. If the award is in the form
of cash, PAYE should be operated at the time of payment.
(This text has been withheld because of exemptions in the Freedom of Information Act 2000)
Special increments of salary granted on passing examinations are chargeable in the ordinary way.