Income Tax (Earnings and Pensions) Act 2003 section 18

Receipt of money earnings

Section 18 establishes the rules for determining when money earnings are treated as received for income tax purposes, with special additional rules for company directors.

• Money earnings are treated as received at the earliest of when payment is actually made, or when the employee becomes entitled to payment.
• For company directors, three additional trigger points apply: when earnings are credited in the company's accounts, when a period ends (if earnings for that period are already determined), or when the earnings amount is finally determined after the period.
• The definition of "director" is broad, covering board members, sole directors, member-managed companies, and shadow directors — but not professional advisers whose advice the directors happen to follow.
• Where payments or sums are made on account of earnings, this section determines when the corresponding amount of general earnings is treated as received.