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HMRC internal manual

Employment Income Manual

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HM Revenue & Customs
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Termination payments and benefits: valuation of non- cash benefits received after 6 April 1998: usual application of cash equivalent for Section 401 ITEPA 2003 purposes

Section 415(2) to (7) ITEPA 2003

EIM13270 explained that in order to find the value of a non-cash benefit received on or after 6 April 1998, you normally calculate its cash equivalent following the definition in the benefits code. That definition is:

  • for living accommodation, the cash equivalent is defined in Section 415(7) ITEPA 2003, see EIM13330 for details
  • for all other benefits, the cash equivalent of the benefit is defined in Section 415(2)(b) ITEPA 2003. It is found by:
    • first identifying where the type of benefit being provided is dealt with in the benefits code (see EIM21006). For example, where the benefit provided is the use of a car, the rules in Part 3 Chapter 2 ITEPA 2003 are the appropriate ones to use because they deal with the benefit of cars made available for private use. EIM13310 lists various benefits and the relevant instructions for finding their cash equivalents.
    • then follow the rules that establish what the cash equivalent for that benefit is in that Chapter. EIM13300 below gives more details.

Notes

When applying the benefits code for this purpose:

  • treat any reference to employee in the code as a reference to the person taxable under Section 401 ITEPA 2003 or to any other person receiving the benefit, as appropriate
  • treat any reference to employer in the code as including a reference to an ex-employer
  • remember that Section 401 ITEPA 2003 applies to excluded employments (see EIM20007).