SE16090 - Vouchers and credit-tokens: meaning of credit- token

Section 142(4) and (5) ICTA 1988

A “credit-token” is something which merely has to be produced in order to obtain goods and services without immediate payment. It does not have to be capable of being exchanged for goods or services.

A credit-token is “any card token document or other thing”, except a non-cash or cash voucher, which is given to a person by someone who undertakes:

• to supply money, goods or services on credit on its production, for example, a credit card supplied by a retailer or
• to pay a third party for the supply of money, goods or services on its production to that third party, for example, a credit card like a Mastercard or Visa card supplied by a credit card company.

A charge to tax arises where such a credit-token is provided for an employee or a relation ( SE16080) by reason of the employment. For the amount chargeable as an emolument see SE16140.

The use of a “credit-token” to operate a machine, for example, a cash dispenser, is deemed to constitute its production.

The charge arising from the use of credit-tokens eliminates any argument over whether the payment by an employer of credit card bills run up by an employee is a discharge of the employee's pecuniary liability ( SE00580). There is thus a uniform charge on all employees in these circumstances however the credit card facilities are provided.