HMRC have issued draft legislation for consultation on the latest round of extra-statutory concessions to be enshrined in law. This covers concessions on directors fees, Professional remuneration, Financial loss allowance and Payments from medical committees to members.

The concessions to be enacted are:

  • ESC A37: Directors’ fees
    • This allows directors’ fees received by partnerships and companies to be treated as trading income for income tax purposes rather than employment income where certain conditions are met.
  • Employment Income Manuals (EIM03002): Professional remuneration
    • A similar concession applied to allow some employment income to be treated as ordinary trading professional income, and allowing expenses against that income, where certain conditions are met.
  • EIM01120: Financial loss allowance
    • These payments for loss of earnings are paid to members of public bodies, such as the NHS; magistrates; and to persons on jury duty.
    • Provided that the payment is calculated to do no more than replace the ‘lost salary’ the allowance is not taxable as employment income.
    • A variation on these rules apply for business income where the payments are not to ‘fill a hole in the profits’, such as subsistence allowances.
  • EIM61030: Payments from medical committees to members
    • Special rules that apply to Doctors who sit on a Local Medical Committee to represent the views of their Practice

The consultation will run until 9 November 2017.


Employers: Essential know-how

Directors: Essential know-how

The draft Statutory Instrument to enact these ESCs can be found here.


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