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HMRC internal manual

Employment Income Manual

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HM Revenue & Customs
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Particular benefits: heating, lighting, cleaning etc. expenses of job-related living accommodation: 10% limit: meaning of net amount of the emoluments: dealing with back-pay and earnings from an associated employer

Section 315(5) ITEPA 2003

When calculating net earnings (see EIM21722) you can only include earnings for the year under review. If the employee has received back pay for an earlier year you must leave it out of account for the year under review. (You need to include it in the earnings for the earlier year for the purpose of applying the 10 per cent restriction in that earlier year.) This applies even though the earnings will actually be chargeable in the year they are received.

If the employer is a company, the earnings from any employment with an associated company must be included. An associated company is one that is:

  • under the control of the company, or
  • under the control of the same persons as the company.

“Control” has the meaning given to it by Section 840 ICTA 1988 (see EIM20213).