Income Tax (Earnings and Pensions) Act 2003 section 693

Cash vouchers

Section 693 sets out when employers must operate PAYE on cash vouchers provided to employees, including the timing and amount of the deemed payment, and the circumstances in which the PAYE requirement does not apply.

• When an employee receives a taxable cash voucher, the employer must treat it as a PAYE income payment at the time of receipt, equal to the value determined under section 81.
• The PAYE requirement does not apply where the voucher is used to meet expenses that, if paid directly by the employer, would not have been PAYE income other than as an expenses payment.
• Similarly, where a voucher is exchanged for cash which is then used to meet such expenses, PAYE does not need to be operated.
• A cash voucher appropriated to an employee — for example by being attached to a card held for the employee — is treated as received at the time it is appropriated.