SE01090 - Emoluments of employees and office holders: discounts

Section 19(1)1 ICTA 1988

An employer may allow an employee to buy goods from him at a discount. The discount is not an emolument chargeable under Section 19(1)1 ICTA 1988 as it cannot be converted into money. There will only be a chargeable emolument if what the employee pays is less than the second-hand value of the goods (see SE00540) or their cost. In the case of a director, or an employee with emoluments at a rate of £8,500 a year or more see SE21640.

See also SE64600 regarding Statement of Practice SP4/97. The Statement was drafted in consultation with representatives of the insurance industry, but the guidance which it contains about the treatment of commissions, cashbacks and discounts received by employees is of general application.