Regulation 5 Amendment of the principal Regulations

For regulation 17A (payments to directors to be treated as earnings)^f1 there is substituted—

“Payments to be treated as earnings

17A

(1)

For the purposes of section 3 of the Act (earnings) the amounts specified in paragraphs (2) to (4) of this regulation shall be treated as remuneration derived from an employed earner’s employment.

(2)

The amount specified in this paragraph is the amount of any payment by a company to or for the benefit of any of its directors if—

(a)

apart from this paragraph the payment would, when made, not be earnings for the purposes of the Act; and

(b)

the payment is made on account of or by way of an advance on a sum which would be earnings for those purposes.

(3)

The amount specified in this paragraph is any amount in respect of which an employed earner is chargeable to tax under Schedule E under any provision of sections 140A to 140H of the Income and Corporation Taxes Act 1988 (conditional acquisition of shares and convertible shares)^f2 in respect of the acquisition, on or after 9th April 1998, of shares or an interest in shares.

(4)

The amount specified in this paragraph is any amount in respect of which—

(a)

an employed earner is chargeable to tax under Schedule E under any provision of Part X of Schedule 8 to the Finance Act 2000 (employee share ownership plans—income tax); and

(b)

income tax is deductible under regulations made under section 203 of the Income and Corporation Taxes Act 1988 (PAYE regulations).”.