Employment income: discounts
Section 62 ITEPA 2003
An employer may allow an employee to buy goods from him at a discount. The discount does not count as earnings within Section 62 ITEPA 2003 as it cannot be converted into money. The employee only receives earnings if what they pay is less than the second-hand value of the goods (see EIM00540) or their cost. As regards directors, and employees who are not lower paid, see EIM21704.
See also EIM64600 regarding Statement of Practice SP4/97. The statement was drafted in consultation with representatives of the insurance industry, but the guidance which it contains about the treatment of commissions, cashbacks and discounts received by employees is of general application.