Income Tax (Earnings and Pensions) Act 2003 section 7

Meaning of "employment income", "general earnings" and "specific employment income"

Section 7 defines the three key terms — "employment income", "general earnings" and "specific employment income" — that underpin how earnings from employment are categorised and taxed throughout the Tax Acts.

• "Employment income" is the broadest term, covering actual earnings, amounts treated as earnings (such as benefits in kind and agency worker payments), and amounts that count as employment income (such as share-related income and income provided through third parties).
• "General earnings" includes actual earnings and amounts treated as earnings, but excludes any income that is exempt from tax.
• "Specific employment income" covers amounts that count as employment income (for example, share scheme income or income routed through third parties), again excluding any exempt income.
• Amounts "treated as earnings" arise from specific rules covering agency workers, intermediary arrangements, managed service companies, the benefits code, certain termination payments that cannot benefit from the £30,000 threshold, and capital allowance balancing charges; amounts "counting as employment income" arise from rules on non-earnings and non-share-related income, securities and securities options, third-party arrangements, and any other relevant legislation.