TCTM04223 - Income: employment income rules - Specific payments and benefits in kind excluded from employment income for tax credit purposes: Provision of Transport to an Employee

The Tax Credits (Definition and Calculation of Income) Regulations 2002, Reg 4 (4) Table 1 (items 2A, 2B, 2C)

Payments in respect of expenses (including the reimbursement of expenses) which are

• Incurred in the provision of transport to a disabled employee (as defined in section 246(4) of the ITEPA 2003) if no liability to income tax arises in respect of that payment under section 246 of ITEPA
• Incurred in the provision of a car or expenses incurred in connection with the car eg fuel, to a disabled employee if no liability to income tax arises in respect of that payment under section 247 of the ITEPA 2003
• Incurred on transport if no liability to income tax arises under section 248 of ITEPA

(See EIM10080)

Note: With effect from 6 April 2017 the way in which many salary sacrifice and benefit in kind schemes are taxed will change, which means that some tax credit claimants will see an increase in their taxable income.

For the purposes of tax credits, where one of these schemes is in operation the taxable income figure should be used.