EIM20102 - The benefits code: more on working out if an employment has earnings of less than £8,500 a year: authorised deductions

Section 218(4) ITEPA 2003

This section only applies for 2015 to 2016 and earlier.

EIM20101 explains how to calculate whether or not an employment has earnings of less than £8,500 a year.

Step 3 provides for the subtraction in the calculation of “authorised deductions” (section 218(4) ITEPA 2003). The deductions concerned are (references to ITEPA 2003, unless otherwise stated):

  • capital allowances treated as deductions (section 262 CAA 2001), EIM36890
  • employee liabilities and indemnity insurance (section 346), EIM30500
  • expenses of entertainers (section 352), EIM62800
  • payments by non-domiciled employees (section 355)
  • fixed sum deductions from earnings out of the public purse (section 368), EIM60720
  • various deductions for foreign travel expenses (sections 370 to 376), EIM34000
  • personal security assets and services (section 377), EIM21810
  • contributions to exempt approved superannuation schemes or exempt statutory schemes (sections 592(7) and 594 ICTA 1988) and
  • payroll giving to charities (section 713).

Deductions not included in the calculation

For the purpose of the calculation in section 218 no deduction can be given for:

  • necessary expenses (sections 336), EIM31600
  • expenses of travelling in the performance of the duties or to a temporary workplace (sections 337 and 338), EIM31810
  • professional membership fees (section 343), EIM32880
  • annual subscriptions (section 344), EIM32880 and
  • clergymens’ expenses (section 351), EIM60040