Beta This part of GOV.UK is being rebuilt – find out what beta means

HMRC internal manual

Employment Income Manual

Employment income: basis of assessment for general earnings: table setting out the basis of assessment to be used for particular types of payment, and benefits in kind

The receipts basis of assessment applies to all general earnings (including benefits in kind) from an office or employment.

There are rules that tell you when different types of earnings are treated as received. They are summarised in the following table.

Table 1 covers all directors and employees whatever their rate of pay.

Table 2 provides additional rules that do not apply for the tax year 2015 to 2016 and earlier to employees in excluded employments (see EIM20100).

Table 1: all directors and employees whatever their rate of pay

Type of earnings Years assessable Statutory authority
Employee resident and domiciled in UK: money earnings The year the earnings are received Section 15(2) ITEPA 2003
Employee resident but not domiciled in UK and does not meet the conditions of section 26A: money earnings except chargeable overseas earnings The year the earnings are received Section 15(2) ITEPA 2003
Employee resident but not domiciled in UK and meets the conditions of section 26A: money earnings for UK duties The year the earnings are received Section 15(2) ITEPA 2003
Employee not resident in UK: money earnings for UK duties The year the earnings are received Section 27(2) ITEPA 2003
Employee resident but not domiciled in UK and does not meet the conditions of section 26A: chargeable overseas earnings The year the earnings are received in the United Kingdom Section 22(2) ITEPA 2003
Employee resident but not domiciled in the UK and meets the conditions of section 26A: foreign earnings The year the earnings are received in the United Kingdom Section 26(2) ITEPA 2003
Money’s worth The year the benefit is provided Section 19(4) ITEPA 2003
Pecuniary liability The year the payment is made Section 19(4) ITEPA 2003
Non-cash vouchers Cheque voucher - the year the employee uses it to get goods or services or, if earlier, the year it is appropriated to the employee. Other voucher - the later of the year the employer incurs the expense or the year the voucher is received (see EIM16030). Section 19(3) ITEPA 2003
Credit tokens The year the token is used Section 19(2) ITEPA 2003
PAYE cash vouchers The year the employee receives the voucher or, if earlier, the year it is appropriated to the employee Section 19(2) ITEPA 2003
Living accommodation The year during which accommodation is provided Section 19(2) ITEPA 2003
Payments on cessation, or a change in duties or earnings etc    
[These payments are taxed as “specific employment income”, not general earnings. They are included here for completeness.] The year in which the payment or benefit is received.
As regards the meaning of receipt in relation to payments and benefits chargeable under Section 403, see EIM13110. Section 403(2) ITEPA 2003
       
  Sick pay The year the sick pay is received See above entries for money earnings
  Restrictive covenants The year the payment is made Section 225(1) ITEPA 2003
  Pensions and annuities The receipts basis does not apply to pensions and annuities. The amount chargeable is the amount arising, or payable, in the year Sections 571, 578, 581, 616 and 634(2) ITEPA 2003
  Social Security benefits The receipts basis does not apply to social security benefits. The amount chargeable is the amount arising, or payable, in the year Section 661(2) ITEPA 2003

Table 2: additional rules that do not apply for tax year 2015 to 2016 and earlier to employees in excluded employments

Type of earnings Years assessable Statutory authority
Expenses payments The year the payment is received See entries for money earnings in table 1 above
Benefits other than those mentioned below The year the benefit is provided Section 19(2) ITEPA 2003
Car benefits Years in which the car is available Section 19(2) ITEPA 2003
Car fuel Years in which the fuel is provided Section 19(2) ITEPA 2003
Beneficial loans Years in which the loan is outstanding Section 19(2) ITEPA 2003
Loan written off etc The year the loan is written off or released Section 19(2) ITEPA 2003
Disposal of shares (see SSM6.52) The year of the disposal Section 19(2) ITEPA 2003
Director’s PAYE paid by employer The year in which the tax is paid to the Board, except that if the tax is paid after the directorship has ended the charge is in the year the directorship ended (see EIM21792) Section 19(2) ITEPA 2003