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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Meaning of “remitted to the United Kingdom”: benefits in kind and UK-linked debts

Sections 809L ITA 2007 (inserted by Finance Act 2008)

Benefits in kind

The definition of “remitted to the United Kingdom” in Section 809L ITA 2007 (see EIM40302) includes general earnings brought to, received in or used in and enjoyed in the United Kingdom in a form other than money. The benefits code as defined by Section 63(1) ITEPA 2003 provides a number of examples of earnings that are capable of satisfying the definition including taxable benefits arising from the provision of:

  • living accommodation
  • loans
  • cars available for private use.

Some parts of the benefits code do not apply to employees in lower paid employment. See EIM20115 for how to decide whether an employee whose earnings may be charged on remittance is in lower paid employment.

Relevant debts

With effect from 6 April 2008 Section 809L(3)(c) provides that general earnings within Section 22 or 26 are treated as remitted to the United Kingdom if they are used outside the United Kingdom to satisfy (wholly or in part) a relevant debt. The remittance is treated as taking place at the same time as the earnings are used to satisfy the debt. Section 809L(7) defines a relevant debt as:

  • a debt for money lent to the employee in the United Kingdom, or for interest on money so lent
  • a debt for money lent to the employee outside the United Kingdom and received in the United Kingdom
  • a debt incurred for satisfying a UK-linked debt.

Sometimes the money lent to the employee outside the United Kingdom may not be received in the United Kingdom until after the general earnings have been used to satisfy the original debt. In those circumstances, the earnings are treated as remitted to the United Kingdom at the time when the money lent is received here.

Section 809L treats general earnings as remitted to the United Kingdom where the earnings are held by a lender in such circumstances that they are available to satisfy or reduce the debt by set off or otherwise. It is also a requirement that the amount owed by the borrower or the time for repayment of the debt depends on the amount or value of the earnings held by the lender.

The special rules for Foreign Income in Part 8 IT(TOI)A 2005) and the use of credit cards applies equally to employment income within Sections 22 or 26. In practice, references to Section 833 IT(TOI)A 2005 can be read as references to Section 809L(7) ITEPA 2003.