SE16180 - Vouchers and credit-tokens: dispensations

Section 144(1) and (2) ICTA 1988

For a description of the points to consider in a case involving a voucher or a credit- token see SE16030.

A dispensation from the application of Section 141 ICTA 1988 and Section 142 ICTA 1988 may be granted where

• An employee is provided with a non-cash voucher exchangeable for goods and services, cash vouchers such as traveller's cheques, or a credit-token and
• The voucher or credit-token can be used only to meet an expense which would be wholly admissible as a deduction from the employee's remuneration.

This applies whether the employee is within Part V Chapter II ICTA 1988 or not.

Examples are where

• An employee is provided with a voucher or traveller's cheques solely to cover the cost of hotel accommodation on a business trip, or
• A lorry driver is provided with a credit card which can only be used for buying diesel fuel for the lorry he is driving.

If a voucher or credit card can be used to meet any private expenses (including expenses which are partly business and partly private) no dispensation can be given unless there are arrangements whereby the employee makes good the whole of the private expenditure.

The fact that a dispensation is given under the rules relating to vouchers or credit- tokens does not, strictly, prevent the relevant expenses from being assessable upon directors and other employees within Part V, Chapter II. In practice such a dispensation may normally be regarded as effective also for Part V, Chapter II. If there is any doubt whether the employee will have emoluments at a rate of £8,500 a year or more, the employer will, however, need to keep record of the expenses covered by the dispensation.

For the rules to be used in deciding whether to issue a dispensation, and the wording of a dispensation, see SE30051 onwards.