EIM21122 - The benefits code: making good by waiver of remuneration

Section 203(2) ITEPA 2003

A director or employee may wish to apply money earnings, which they are treated under EIM42260 as having received, to “make good” the cost of a benefit chargeable on them.

They can only do this in respect of earnings which are received or treated as received out of their net earnings, that is after tax has been deducted under PAYE.

The net amount applied in this way will reduce the “cash equivalent” of the benefit. It will not reduce the amount of the money earnings which are taxable.