A cheque is not money but it can readily be converted into money by the employee at the amount for which it is made out. It is money's worth (see EIM00530). So for all practical purposes a cheque payment can be treated as a money payment. The same goes for National Savings Certificates. Both can be cashed by the employee at face value and that is the amount that is treated as earnings by Section 62(3) ITEPA 2003.
But an employer may give an employee something that is not
capable of being turned into money at face value. In that case, the
amount that is treated as earnings under Section 62(3)(b) ITEPA
2003 is the amount that the employee could get for the item if he
or she were to dispose of it as soon as it came into their
possession. That is, its second-hand value (see example
EIM00550).
[There is an exception to this rule. That is where a benefit
is obtained by means of a voucher or credit token. Then the
chargeable amount is the cost of providing the voucher or token and
the money, goods or services for which it is capable of being
exchanged (see
EIM16010 onwards).]
Sometimes, the employee pays the employer for the item he or
she has received. If the amount paid is equal to or greater than
the value of the item there is no tax charge on the employee. But
if the amount paid is less than the second-hand value of the item
in question the difference is taxed as earnings under Section 62
(see example
EIM00560).
As regards the transfer of land and houses to employees see
EIM08001.
