Put very simply, if the arrangements provide what is in substance a reward or recognition or loan in connection with the employee’s current, future or former employment then a charge to income tax on what is regarded as remuneration will arise. This is known as Pt. 7A income referring to the appropriate legislation (ITEPA 2003, Pt. 7A) and will be taxed under the PAYE process.
Where there is a conflict or possibility of double-charging, occasioned by other legislation dealing with remuneration (such as Pt. 6), Pt. 7A prevails if it is applicable.