EIM21002 | The benefits code: what is meant by a “benefit”

Section 201 ITEPA 2003

Section 201(1) ITEPA 2003 concerns “employment-related benefits”.

A benefit is defined in section 201(2) as “a benefit or facility of any kind”. When a benefit is provided to an employee (or to any member of his or her family or household (section 721(5) ITEPA 2003) by reason of the employment (EIM20501), it is an “employment-related benefit” (section 201(2)).

The definition of what is a benefit is thus very wide and includes everything that confers a special bounty of any description on the recipient.

However, something (other than a loan where special provisions apply, see EIM26101 and EIM26111) which is a “fair bargain” (EIM21004) between the employer and the employee is not a “benefit”.

For benefits specifically exempted from charge see EIM21240.