SE42260 - Emoluments from offices and employments: basis of assessment - meaning of "received"

Section 202B(1) ICTA 1988

A money emolument within Case I or II of Schedule E is chargeable to tax in the year that it is received (see SE42200).

A money emolument is treated as received for assessment purposes, and paid for PAYE purposes, on the earliest of the following

• when a payment of emoluments is actually made or when a payment on account of emoluments is made (see SE42270)
• the time when a person becomes entitled to payment of emoluments or a payment on account of emoluments (see SE42290)

and in the case of directors only

• the date when emoluments are credited in the company’s accounts or records (see SE42310)
• where the amount of the emoluments is determined before the end of the period to which they relate, the date that period ends (see SE42330)
• where the amount of the emoluments is determined after the end of the period to which they relate, the date the amount is determined (see SE42340).

As regards the time when a person has to be a director for the special rules to apply, see SE42360.

Note that where more than one time can be taken as the time of receipt you take the earliest time.

For example, an employee may be entitled to be paid an emolument on 31 March 2001 but actual payment may not be made until 12 April 2001. Receipt is deemed to take place on 31 March 2001 (applying the entitlement rule) and the emolument is therefore assessable in, and PAYE must be operated in, 2000/01.