EIM71302 - Tax treatment of working rule agreements: operation of agreements by employers

The special tax procedures for working rule agreements only apply to the payment of travel and lodging allowances. The special arrangements do not extend to benefits in kind (for example, the provision of travel vouchers, the use of a company car or van etc.), therefore the normal rules for taxing benefits in kind apply.

For a list of the working rule agreements for which special taxation procedures have been established see EIM71320. These procedures can operate only where the employer makes payments in strict accordance with the terms and conditions of the working rule agreement. The employer need not be a member of the relevant employer’s federation, nor do the employees have to belong to the trade union concerned. Payments made outside the framework of a working rule agreement must be dealt with for tax purposes as described in EIM10070 and in the Employer’s Further Guide to PAYE and NICs.