Section 268 — Income Tax (Earnings and Pensions) Act 2003: Exemption of vouchers and tokens for incidental overnight expenses

Exemption of vouchers and tokens for incidental overnight expenses 268 1 No liability to income tax arises by virtue of Chapter 4 of Part 3 (taxable benefits: vouchers and credit-tokens) in respect of a non-cash voucher or a credit-token if or to the extent that the voucher or token is used by an employee to obtain goods, services or money if conditions A to C are met.

2 In the case of goods or services, condition A is that—

a obtaining them is incidental to the employee’s absence from the place where the employee normally lives, and b that absence is for a continuous period in relation to which the overnight stay conditions are met (“ the qualifying period ”).

3 In the case of money, condition A is that—

a it is obtained for the purpose of obtaining goods or services, and b obtaining them is incidental to such an absence during such a period.

4 Condition B is that an amount would not be deductible under section 362 or 363 (deductions where non-cash voucher or credit-token provided) in respect of the cost of obtaining the goods or services.

5 Condition C is that the exemption provisions total in respect of the qualifying period does not exceed the permitted amount.

6 In this section— “ the overnight stay conditions ” has the same meaning as in section 240 (exemption of incidental overnight expenses and benefits) (see section 240(4)), and “ the exemption provisions total ” and “ the permitted amount ” have the same meaning as in section 241 (incidental overnight expenses and benefits: overall exemption limit) (see section 241(2) and (3)).