This site uses cookies. By continuing to browse the site you are agreeing to our use of cookies. To find out more about cookies on this website and how to delete cookies, see our Cookie Policy.
Analytics

Tools which collect anonymous data to enable us to see how visitors use our site and how it performs. We use this to improve our products, services and user experience.

Essential

Tools that enable essential services and functionality, including identity verification, service continuity and site security.

Where Taxpayers and Advisers Meet

Taxable Benefits - ITEPA or ITTOIA

section 44
Posts:4467
Joined:Thu Oct 30, 2008 12:47 pm
Re: Taxable Benefits - ITEPA or ITTOIA

Postby section 44 » Thu Apr 21, 2016 5:22 pm

But three pages in, I really have not got a clue what your actual question was.
+1

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Taxable Benefits - ITEPA or ITTOIA

Postby bd6759 » Thu Apr 21, 2016 5:44 pm

But three pages in, I really have not got a clue what your actual question was.
+1
Correct. It is now 3+1 pages. ;-)

Taxo
Posts:21
Joined:Sat Nov 07, 2015 2:32 pm

Re: Taxable Benefits - ITEPA or ITTOIA

Postby Taxo » Fri Apr 22, 2016 9:52 am

But three pages in, I really have not got a clue what your actual question was. And I don't think you understand anything you have been told.
Quite the contrary, what you have said has clarified things enormously and I thank you for it. All I can say about where I'm coming from is that one part of the Civil Service is forced by a particular regulation to use an accounting method that could be legally unsafe if it were to be challenged in court. The difficulty arises because as you have said these state benefits cannot be separated from employment income because they derive from employment income. Its looking like an increasingly intractable problem. What I need under ITEPA is a way to separate employment income from taxable benefits derived from that income and within existing legislation. It would have been nice to have had a 403 type construct which provides the separation I'm looking for but for obvious reasons this cannot apply to the benefits in question.

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Taxable Benefits - ITEPA or ITTOIA

Postby bd6759 » Fri Apr 22, 2016 11:28 am

All I can say about where I'm coming from is that one part of the Civil Service is forced by a particular regulation to use an accounting method that could be legally unsafe if it were to be challenged in court.
Maybe if you could explain this, I might be able to point you in the right direction.
The difficulty arises because as you have said these state benefits cannot be separated from employment income because they derive from employment income.
I have not said that. It is nonsense to suggest that social security payments and employment income are conjoined let alone inseparable.
It would have been nice to have had a 403 type construct which provides the separation I'm looking for but for obvious reasons this cannot apply to the benefits in question.
You have read one section and are clinging on to it even although it has nothing to do with social security payments or benefits. That is why I said you do not understand what you are being told. Part 10 (s655 to s681) covers social security payments and benefits. It sets out very clearly what is charged to tax and who is liable for the tax, and what is exempt from tax. You need to forget about s403 and read sections 655 to 681.

You may also want to read the Income Tax (PAYE) Regulation 2003 (Statutory Instrument 2003 No 2682) which covers the operation of PAYE and (at Part 8 (regulations 148 to 184)) how it applies to social security benefits.

Taxo
Posts:21
Joined:Sat Nov 07, 2015 2:32 pm

Re: Taxable Benefits - ITEPA or ITTOIA

Postby Taxo » Fri Apr 22, 2016 2:37 pm

You have read one section and are clinging on to it even although it has nothing to do with social security payments or benefits.
I did say construct. Benefits (403) relate to redundancy but the construct provides a clear divide between benefit and employment income. The regulation requires HMRC to supply an ITEPA gross income. If SSP benefits had been paid by the employer the gross earnings figure would consolidate SSP. Nothing wrong with this outside of the regulation. The gross figure supplied by HMRC would see another consolidation, that of JSA. Normally this impacts the individual through a downwards adjustment to the tax free allowance. Sorry I can't go into more detail on the accountancy side but what I can say is that a switch is being turned on when it shouldn't be and this is causing the perceived difficulty.

bd6759
Posts:4262
Joined:Sat Feb 01, 2014 3:26 pm

Re: Taxable Benefits - ITEPA or ITTOIA

Postby bd6759 » Fri Apr 22, 2016 6:00 pm

Benefits (403) relate to redundancy but the construct provides a clear divide between benefit and employment income.
Read s401 to see what s403 refers to.
The construct does not seek to divide benefits from income. Quite the reverse. It seeks to treat benefits and other payments caught by s401 (which would not otherwise be taxable income) as taxable income.
The regulation requires HMRC to supply an ITEPA gross income..
Which regulation?


Return to “HMRC Administration, Practices & Methods”