Income Tax (Earnings and Pensions) Act 2003 section 312F

Section 312B: the office-holder requirement

Section 312F sets out the office-holder requirement that a company must satisfy in order for bonus payments to qualify for exemption under section 312B.

• A company meets the office-holder requirement if the proportion of directors, office-holders and their connected employees does not exceed two fifths of the total workforce.
• The test is expressed as a fraction: the number of directors, office-holders and connected employees (ND) divided by the total number of employees and office-holders (NE).
• The numerator (ND) includes any person who is a director or office-holder, plus any employee who is connected with a director or office-holder.
• The denominator (NE) is the total headcount of all employees and office-holders of the company.