EIM20601 - The benefits code: expenses payments of directors and employees: scope

Sections 70(1) and 72(1) ITEPA 2003

All sums paid in respect of expenses to a director or employee, whose employment is not an excluded employment ( EIM20007), by reason of their employment (Section 70(1) ITEPA 2003) have to be treated as earnings chargeable to tax as employment income ( EIM00510) unless:

• they are otherwise chargeable to income tax ( EIM20602) or
• they are exempt ( EIM21240) or
• they are paid in respect of expenses incurred in connection with a van or car to which a scale charge applies (EIM22130 and EIM23020) or
• an Inspector has issued a dispensation in respect of them ( EIM30051 onwards).

A sum paid in respect of expenses includes any sum put at the employee's disposal and paid away by him (Section 72(1) ITEPA 2003).

Where an employee makes a payment on behalf of his or her employer, see EIM01110.