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HMRC internal manual

Employment Income Manual

The benefits code: meaning of

Section 67(3) ITEPA 2003A “full-time working director” is a director who is required to devote substantially the whole of his time to the service of the company in a managerial or technical capacity.

“Substantially the whole” has its normal meaning. It will allow for the director working slightly less than the full normal working hours of the company. It is unlikely to cover a director who works less than three-quarters of the full normal working hours. This is so, even though the director considers the hours worked are all that are necessary for the performance of the duties, or that factors such as age excuse working longer hours.

The reference to three-quarters of the full normal working hours is a rule of thumb that may be appropriate in most cases. If, exceptionally, it is necessary to consider the definition of full- time working director in any appeal hearing , rely on the statutory definition rather than this rule of thumb.

As regards “full-time” working generally see CIR v D Devine and Sons Ltd (41TC210).

A director of more than one company may be regarded as a full-time working director of the company that occupies the largest proportion of his time provided that:

  • more than half the full normal working hours for that company are worked and
  • at least three-quarters of those hours for the companies as a whole.See

EIM20203 where illness affects a director’s working time.