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As indicated in E4.401, with effect for 2003/04 and later years ITEPA 2003 introduced a definition of 'earnings' which includes 'any gratuity or other profit or incidental benefit of any kind obtained by the employee if it is money or money's worth'¹ and which then goes on to define 'money's worth' as something that is of direct monetary value to the employee, or capable of being converted into money or something of direct monetary value to the employee². The latter definition is intended merely to reflect the existing authorities. In particular, the case of Tennant v Smith (see below) established that a benefit obtained by an employee from his employment that could not be converted into money was not a perquisite for Schedule E (now ITEPA 2003) purposes. On the other hand, money's worth may be something that cannot be actually converted if it is nevertheless of direct monetary value to the employee; in Hartland v Diggines (see below), for example, the benefit was the discharge of a debt owed by the employee.

Thus,