EIM11803 – PAYE: special type of income:
background
Part 11 Chapter 4 ITEPA 2003
Payments of PAYE income made in a monetary form, such as cash,
cheque or credit to a bank account or director’s loan
account, are capable of being made subject to the deduction of the
correct amount of tax. But some payments of PAYE income have a
non-monetary form. Such payments present the person responsible for
deducting and accounting for tax with a problem.
Part 11 Chapter 4 ITEPA 2003, together with Section 710 ITEPA
2003, says who is responsible and how that person should act in
order to comply with the obligation to deduct and account for the
tax due in respect of payments of the following special types of
income:
- cash vouchers (see
EIM11840)
- non-cash vouchers (see
EIM11845)
- credit-tokens (see
EIM11850)
- readily convertible assets (see
EIM11855)
- a payment that enhances the value of an
asset (see
EIM11860)
- shares ceasing to be only conditional or
being disposed of (see
EIM11865)
- conversion of shares (see
EIM11870)
- gains from share options (see
EIM11875).
Part 11 Chapter 4 ITEPA 2003 as amended by Schedule 22 FA
2003
For PAYE, the legislation at Part 11 Chapter 4 ITEPA 2003 has
been amended by Schedule 22 FA 2003 as follows:
- Section 698 (PAYE: shares ceasing to be
only conditional or being disposed of) and Section 699 (PAYE:
conversion of shares) have been replaced by a new Section 698
(PAYE: special charges on employment-related securities) with
effect from 1 September 2003 (see
EIM12220 to
EIM12280)
- Section 700 (PAYE: gains from share
options) has been replaced by a new Section 700 (PAYE: gains from
securities options) with effect from 1 September 2003 (see
EIM12300)
- Section 701 (Meaning of
“asset”) has been amended with effect from 9 April 2003
to require the employer to operate PAYE in the event of the
exercise of a right to acquire shares under an approved company
share option plan scheme in certain circumstances (see
EIM12210)
- Section 702 (Meaning of “readily
convertible asset”) has been amended with effect from 10 July
2003 to include all securities unless the security is a share that
is not otherwise a readily convertible asset and shares of that
class are corporation tax deductible (see
EIM12400).
