Section 404 — Income Tax (Earnings and Pensions) Act 2003: How the £30,000 threshold applies

How the £30,000 threshold applies 404 1 For the purpose of the £30,000 threshold in section 403(4) and (5), the payments and other benefits provided in respect of an employee or former employee which are to be aggregated are those provided—

a in respect of the same employment, b in respect of different employments with the same employer, and c in respect of employments with employers who are associated.

2 For this purpose employers are “associated” if on a termination or change date—

a one of them is under the control of the other, or b one of them is under the control of a third person who on that termination or change date or another such date controls or is under the control of the other.

3 In subsection (2)—

a references to an employer, or to a person controlling or controlled by an employer, include the successors of the employer or person, and b “ termination or change date ” means a date on which a termination or change occurs in connection with which a payment or other benefit to which section 403 applies is received in respect of the employee or former employee.

4 If payments and other benefits are received in different tax years, the £30,000 is set against the amount of payments and other benefits received in earlier years before those received in later years.

5 If more than one payment or other benefit is received in a tax year in which the threshold is exceeded—

a the £30,000 (or the balance of it) is set against the amounts of cash benefits as they are received, and b any balance at the end of the year is set against the aggregate amount of non-cash benefits received in the year.

6 In subsection (3)(b), the reference to a payment or other benefit to which section 403 applies includes a reference to a payment or other benefit—

a received in the tax year 2017-18 or an earlier tax year, and b to which this Chapter applied in the tax year of receipt.