Section 310 — Income Tax (Earnings and Pensions) Act 2003: Counselling and other outplacement services

Counselling and other outplacement services 310 1 No liability to income tax arises in respect of—

a the provision of services to a person in connection with the cessation of the person’s employment, or b the payment or reimbursement of—

i fees for such provision, or ii travelling expenses incurred in connection with such provision, if conditions A to D and, in the case of travel expenses, condition E are met.

2 Condition A is that the only or main purpose of the provision of the services is to enable the person to do either or both of the following—

a to adjust to the cessation of the employment, or b to find other gainful employment (including self-employment).

3 Condition B is that the services consist wholly of any or all of the following—

a giving advice and guidance, b imparting or improving skills, c providing or making available the use of office equipment or similar facilities.

4 Condition C is that the person has been employed ... in the employment which is ceasing throughout the period of 2 years ending—

a at the time when the services begin to be provided, or b if earlier, at the time when the employment ceases.

5 Condition D is that the opportunity to receive the services, on similar terms as to payment or reimbursement of any expenses incurred in connection with their provision, is available—

a generally to employees or former employees of the person’s employer in that employment, or b to a particular class or classes of them.

6 Condition E is that the travel expenses are expenses—

a in respect of which, on the assumptions in subsection (7), mileage allowance relief under Chapter 2 of this Part would be available if no mileage allowance payments had been made, or b which, on those assumptions, would be deductible under Part 5.

7 The assumptions are—

a that receiving the services is one of the duties of the employee’s employment, b that the employee incurs and pays the expenses, and c if the employment has in fact ceased, that it continues.

8 In this section “ mileage allowance payments ” has the meaning given by section 229(2).