Income Tax (Earnings and Pensions) Act 2003 section 79

Voucher issued under approved scheme

Section 79 provides an exemption from the cash voucher tax rules where the voucher is issued under a scheme approved by HMRC, so that tax is collected through PAYE when the voucher is exchanged rather than when it is received.

• Cash vouchers issued under an HMRC-approved scheme are exempt from the normal cash voucher tax charge under this chapter
• The scheme must be approved by an officer of Revenue and Customs at the time the employee receives the voucher
• HMRC will only approve a scheme if it is satisfied that income tax can practicably be deducted through PAYE on all payments made when vouchers are exchanged
• The practical effect is that the tax point shifts from the date the voucher is received to the date it is exchanged for payment