Section 87A | Benefit of non-cash voucher treated as earnings: optional remuneration arrangements ^F1

(1)Where a non-cash voucher to which this Chapter applies is provided pursuant to optional remuneration arrangements—

(a)the relevant amount is to be treated as earnings from the employment for the tax year in which the voucher is received by the employee, and

(b)section 87(1) does not apply.

(2)To find the relevant amount, first determine which (if any) is the greater of—

(a)the cost of provision (see section 87(3)), and

(b)the amount foregone with respect to the benefit of the voucher (see section 69B).

(3)If the cost of provision is greater than or equal to the amount foregone, the “relevant amount” is the cash equivalent of the benefit of the non-cash voucher (see section 87(2)).

(4)Otherwise, the “relevant amount” is the difference between—

(a)the amount foregone, and

(b)any part of the cost of provision that is made good by the employee, to the person incurring it, on or before 6 July following the relevant tax year.

(5)If the voucher is a non-cash voucher other than a cheque voucher, the relevant tax year is—

(a)the tax year in which the cost of provision is incurred, or

(b)if later, the tax year in which the employee receives the voucher.

(6)If the voucher is a cheque voucher, the relevant tax year is the tax year in which the voucher is handed over in exchange for money, goods or services.

(7)For the purposes of subsections (2) and (3), assume that the cost of provision is zero if the condition in subsection (8) is met.

(8)The condition is that the non-cash voucher would be exempt from income tax but for section 228A (exclusion of certain exemptions).