Chapter 5: Vouchers

These flashcards cover essential concepts related to vouchers, including definitions, tax implications, and classifications as described in the lecture notes.

What is the taxable provision of vouchers under the benefits code?

The provision of vouchers and credit tokens is taxable under ITEPA 2003, Pt 3, Ch 4.

What defines a cash voucher?

A cash voucher is defined as a voucher, stamp or document that can be exchanged for a sum of money not substantially less than the expense incurred by the provider.

What must the cash equivalent of a cash voucher be treated as for tax purposes?

The full value for which the voucher can be exchanged is treated as earnings for tax purposes.

Under what condition can a voucher be classified as a cash voucher?

If a voucher can be exchanged for a cash amount that is more than 95% of the cost of providing it.

What is a non-cash voucher?

A non-cash voucher is capable of being exchanged for goods or services.

What is excluded from being classified as a non-cash voucher?

A pass or membership card that does not count as a non-cash voucher.

What is the cash equivalent of a non-cash voucher?

The cash equivalent is the cost to the employer of providing it, less any amount made good by the employee.

What defines a transport voucher?

A transport voucher is defined as a voucher that allows a person to obtain passenger transport services.

What happens if a transport voucher is provided for allowable travel expenses?

There are no tax, National Insurance, or reporting implications.

When is an employee taxable on the cost of a transport voucher?

When the travel expenses are not allowable as a deduction from earnings.

What is a travelcard?

A travelcard is a type of transport voucher used for multiple journeys during its validity.

What is the taxable status of a travelcard under ITEPA legislation?

The full amount may be taxable unless it is for purely business travel.

What are statutory exemptions related to non-cash vouchers?

Exemptions include vouchers exchanged for fuel, car parking, incidental overnight expenses, and mobile phone top-ups.

What does a company credit card represent under benefits legislation?

A company credit card is classified as a 'credit token'.

What is the cash equivalent of a credit card's benefit based on?

It is tied to the use of the card for obtaining goods or services.

How should the benefit of using a credit card be reported?

As taxable earnings if used for cash or readily convertible assets; otherwise reported at year-end on Form P11D.

When should the cash equivalent of a cash voucher be included in payroll?

When received by the employee and it is subject to Class 1 NICs.

How should the cash equivalent of a non-cash voucher be treated?

Included in payroll for Class 1 NICs purposes and on Form P11D for income tax.

When is a chargeable benefit incurred using a company credit card?

When the card is used to obtain non-exempt goods or services.

What needs to be applied if a non-cash voucher is exchanged for qualifying deduction goods?

It falls under the exemption where a matching deduction is available.

What is required for a voucher to not trigger a chargeable benefit for the employer?

It must qualify under specific statutory exemptions.

What implications arise if a transport voucher is used for private journeys?

It may lead to a chargeable benefit unless other allowances apply.

What is the general treatment for vouchers regarding PAYE and National Insurance?

Vouchers are treated similarly to regular payments of earnings for tax purposes.

What should be reported on the employee’s Form P11D?

The cash equivalent of non-cash vouchers unless covered by an exemption.

What happens at the end of the year regarding company credit card benefits?

They may be reported on Form P11D if not treated as taxable earnings at the time of use.

What determines whether an employee incurs a chargeable benefit using a credit token?

Using it to obtain goods/services not eligible for deduction.

Who is affected by the benefits code for credit tokens?

It applies to both employees and their family members.

Is the cash equivalent of chargeable benefits subject to NICs?

Yes, chargeable benefits typically are subject to Class 1A NICs.

What does ITEPA stand for?

Income Tax (Earnings and Pensions) Act.

What are the consequences of not allowing deductions for travel expenses?

The employee is taxed on the cost of the transport voucher provided by the employer.