Commentary on Sections Example 3 £150(Pe) – £50(E) = £100 Section 203: Cash equivalent of benefit treated as earnings
806.This section establishes that the cash equivalent is to be treated as earnings, and provides guidance on how to work out the cash equivalent.
807.Subsection (1) derives from the closing words of section 154(1) of ICTA. It provides that the cash equivalent is the amount treated as earnings. The words “for the tax year in which it is provided” are not in section 154. This clarification of the timing rule is explained more fully in Note 7 in Annex 2.
808.Subsection (2) derives from section 156(1) of ICTA. It provides the basic rule that the cash equivalent is the cost of provision less amounts made good.
809.Subsection (3) derives from section 156(2) to (7) of ICTA and indicates which sections provide the rules for finding the cost of the benefit.