Income Tax (Earnings and Pensions) Act 2003 section 389

Exception: employment where earnings not within main charging provisions

Section 389 provides an exception from the tax charge on employer-financed retirement benefit schemes where the employee's earnings from the relevant employment are not taxable under the main charging provisions for employment income.

• This section creates an exception from the charge that would otherwise apply to benefits from employer-financed retirement benefit schemes.
• The exception applies where the employee's earnings from the employment in question fall outside the main income tax charging provisions for employment income.
• The main charging provisions referred to are those in sections 22 and 26 of the Act, which deal with the primary basis on which earnings from employment are brought into the tax charge.
• In practice, this exception is most likely to be relevant for certain non-UK resident employees whose earnings are not subject to UK tax under the normal rules.