Income Tax (Earnings and Pensions) Act 2003 section 227

Scope of Part 4

Section 227 introduces Part 4 of the Act and explains the two different types of tax exemption that apply to employment income.

• Part 4 contains two categories of exemption: "earnings-only exemptions" and "employment income exemptions"
• An earnings-only exemption removes the tax charge on earnings (whether generally or under a specific provision such as a chapter of the benefits code) but does not shield other forms of employment income from tax
• An employment income exemption is broader and removes the possibility of any income tax charge on employment income of any kind, including termination payments and benefits
• Additional earnings exemptions also exist in Part 7 of the Act, covering share incentive plans, SAYE option schemes, CSOP schemes, restricted securities, securities options and priority share allocations