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HMRC internal manual

Employment Income Manual

Vouchers and credit-tokens: meaning of credit-token

Section 92 ITEPA 2003

A credit-token is something that merely has to be produced in order to obtain goods and services without immediate payment. It does not have to be capable of being exchanged for goods or services.

A credit-token is “a credit card, debit card or other card, a token, a document or other object”, except a non-cash or cash voucher, which is given to a person by someone who undertakes:

  • to supply money, goods or services on credit on its production, for example, a credit card supplied by a retailer, or
  • to pay a third party for the supply of money, goods or services on its production to that third party, for example, a credit card like MasterCard or Visa supplied by a credit card company.

A benefit arises where such a credit-token is provided for an employee or a member of his or her family (see EIM16080) by reason of the employment. For the amount of earnings see EIM16140.

The use of a credit-token to operate a machine, for example, a cash dispenser, is deemed to constitute its production.

The earnings arising from the use of credit-tokens eliminates any argument over whether the payment by an employer of credit card bills run up by an employee is a discharge of the employee’s pecuniary liability (see EIM00580). There is thus a uniform charge on all employees in these circumstances however the credit card facilities are provided.