Income Tax (Earnings and Pensions) Act 2003 section 48

Notice of possible effect of deductions on benefit entitlement

Section 48 requires that a partnership share agreement must include a prescribed notice informing the employee how salary deductions under the plan could affect their entitlement to certain state benefits and statutory payments.

• A company cannot enter into a partnership share agreement with an employee unless the agreement contains a notice in the prescribed form.
• The notice must set out the possible effect of partnership share deductions on the employee's entitlement to social security benefits, statutory sick pay, statutory neonatal care pay and statutory maternity pay.
• Both the form and the content of the notice are prescribed by regulations made by HMRC.
• This requirement ensures employees can make an informed decision before agreeing to salary deductions for share purchases.