Income Tax (Earnings and Pensions) Act 2003 section 499

No charge in respect of incidental expenditure

Section 499 provides that employees are not liable to income tax on incidental expenditure incurred in operating a Share Incentive Plan (SIP).

• Incidental costs of running a SIP do not create an income tax charge for employees
• This covers expenditure by the plan trustees, the company that established the SIP, or the employer
• Where the establishing company and the employer are different entities, expenditure by either is exempt
• This section introduced a minor extension to also cover incidental expenditure by the company that established the plan, not just the trustees and employer