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Tax disclosure
The Revenue has published the final text of the following regulations on its website:
* The Tax Avoidance Schemes (Information) Regulations 2004
* The Tax Avoidance Schemes (Promoter and Prescribed Circumstances) Regulations 2004
* The Tax Avoidance Schemes (Prescribed Descriptions of Arrangements) Regulations 2004.
Tax disclosure
The Revenue has published the final text of the following regulations on its website:
* The Tax Avoidance Schemes (Information) Regulations 2004
* The Tax Avoidance Schemes (Promoter and Prescribed Circumstances) Regulations 2004
* The Tax Avoidance Schemes (Prescribed Descriptions of Arrangements) Regulations 2004.
The regulations are also available from local tax offices.
(www.inlandrevenue.gov.uk)
Car benefit
An extra-statutory concession has been published to remove double counting of costs relating to car and car fuel benefits in calculating total earnings for the £8,500 benefits threshold.
Where car or car fuel benefits are provided through a credit card or voucher from the employer, a double tax charge on employees earning £8,500 or more is prevented by sections 239 and 269, Income Tax (Earnings and Pensions) Act 2003, whereby only the car or car fuel benefit charge applies.
The new concession ensures that to the extent that the amount of car or car fuel benefit provided by way of the employer's credit card or non-cash voucher is taken into account in calculating the amount of the car or car fuel benefit charge, it will not also count towards the £8,500 limit as a separate credit card or voucher benefit.
The text of the concession follows.
'Where car or car fuel benefits are provided to employees via a credit token or a voucher chargeable under Chapter 4 of Part 3 of the Income Tax (Earnings and Pensions) Act 2003, then in computing the total amount of earnings from an employment for the purpose of deciding whether it is a lower paid employment under Chapter 11 of Part 3 of the Income Tax (Earnings and Pensions) Act 2003, no account shall be taken of an amount of earnings within Chapter 4 of Part 3 where they would be excluded from charge to tax by virtue of section 239 or section 269, Income Tax (Earnings and Pensions) Act 2003.'
This concession results directly from the illogical decision that the Special Commissioners had to make in Alcock v King (SpC396), when, for the purposes of establishing whether an employee was higher paid, one had to aggregate salary, car benefit, fuel benefit, and credit card payments used to purchase car fuel.
(Inland Revenue news release dated 5 July 2004.)
