Commentary on Sections Example 3 £150(Pe) – £50(E) = £100 Section 217: Meaning of “lower-paid employment”
857.This section defines the concept of “lower-paid employment” that was introduced in the previous section. It introduces the concept of an earnings rate for the employment for the year of less than £8,500.
858.The concept of the “earnings rate” enables Inland Revenue practice as set out in the Schedule E Manual at SE 20101 to SE 20111 to be more easily incorporated in the calculation set out in section 218. By focusing on the “earnings rate” for a particular year it is clear that it is entitlement for the year that is relevant rather than actual receipts. There is no necessary correlation between the amounts included in the calculation of the £8,500 and the amount actually charged to tax in that year. The latter computation is on a receipts basis.
859.This wording makes it clear that there can be only one earnings rate for any employment for any one year. A single tax year cannot be apportioned into separate periods counting as lower-paid and not lower-paid for the same employment.
860.This section derives from section 167(1)(b), as expanded upon by Inland Revenue practice set out in the Schedule E Manual at SE 20110 in particular.