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Travel costs and expenses of non-domiciled employees where duties performed in UK | |
373 Non-domiciled employee’s travel costs and expenses where duties performed | |
in UK | |
(1) This section applies if a person (“the employee”) who is not domiciled in the | |
United Kingdom— | 5 |
(a) receives earnings from an employment for duties performed in the | |
United Kingdom, and | |
(b) an amount is included in the earnings in respect of— | |
(i) the provision of travel facilities for a journey made by the | |
employee, or | 10 |
(ii) the reimbursement of expenses incurred by the employee on | |
such a journey. | |
(2) A deduction is allowed from earnings from the employment which are | |
earnings charged on receipt if the journey meets conditions A and B. | |
(3) Condition A is that the journey ends on, or during the period of 5 years | 15 |
beginning with, a date that is a qualifying arrival date in relation to the | |
employee (see section 375). | |
(4) Condition B is that the journey is made— | |
(a) from the country outside the United Kingdom in which the employee | |
normally lives to a place in the United Kingdom in order to perform | 20 |
duties of the employment, or | |
(b) to that country from a place in the United Kingdom in order to return | |
to that country after performing such duties. | |
(5) If the journey is wholly for a purpose specified in subsection (4), the deduction | |
is equal to the included amount. | 25 |
(6) If the journey is only partly for such a purpose, the deduction is equal to so | |
much of the included amount as is properly attributable to that purpose. | |
374 Non-domiciled employee’s spouse’s or child’s travel costs and expenses | |
where duties performed in UK | |
(1) This section applies if a person (“the employee”) who is not domiciled in the | 30 |
United Kingdom— | |
(a) receives earnings from an employment for duties performed in the | |
United Kingdom, and | |
(b) an amount is included in the earnings in respect of— | |
(i) the provision of travel facilities for a journey made by the | 35 |
employee’s spouse or child, or | |
(ii) the reimbursement of expenses incurred by the employee on | |
such a journey. | |
(2) A deduction is allowed from earnings from the employment which are | |
earnings charged on receipt if conditions A to C are met. | 40 |
(3) Condition A is that the journey— | |
(a) is made between the country outside the United Kingdom in which the | |
employee normally lives and a place in the United Kingdom, and | |
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(b) ends on, or during the period of 5 years beginning with, a date that is | |
a qualifying arrival date in relation to the employee (see section 375). | |
(4) Condition B is that the employee is in the United Kingdom for a continuous | |
period of at least 60 days for the purpose of performing the duties of one or | |
more employments from which the employee receives earnings for duties | 5 |
performed in the United Kingdom. | |
(5) Condition C is that the employee’s spouse or child is— | |
(a) accompanying the employee at the beginning of that period, | |
(b) visiting the employee during that period, or | |
(c) returning to the country outside the United Kingdom in which the | 10 |
employee normally lives, after so accompanying or visiting the | |
employee. | |
(6) If the journey is wholly for the purpose of so accompanying or visiting the | |
employee or so returning, the deduction is equal to the included amount. | |
(7) If the journey is only partly for that purpose, the deduction is equal to so much | 15 |
of the included amount as is properly attributable to that purpose. | |
(8) A deduction is not allowed under this section for more than two inward | |
journeys and two return journeys by the same person in a tax year. | |
(9) In this section “child” includes a stepchild and an illegitimate child, but not a | |
person who is 18 or over at the beginning of the inward journey. | 20 |
375 Meaning of “qualifying arrival date” | |
(1) For the purposes of sections 373(3) and 374(3), a date is a qualifying arrival date | |
in relation to a person if— | |
(a) it is a date on which the person arrives in the United Kingdom to | |
perform duties of an employment from which the person receives | 25 |
earnings for duties performed in the United Kingdom, and | |
(b) condition A or B is met. | |
(2) Condition A is that the person has not been in the United Kingdom for any | |
purpose during the period of 2 years ending with the day before the date. | |
(3) Condition B is that the person was not resident in the United Kingdom in either | 30 |
of the 2 tax years preceding the tax year in which the date falls. | |
(4) If, in a case where condition B applies, there are 2 or more dates in the tax year | |
on which the person arrives in the United Kingdom to perform duties of an | |
employment from which the person receives earnings for duties performed in | |
the United Kingdom, the qualifying arrival date is the earliest of them. | 35 |
Foreign accommodation and subsistence costs and expenses | |
376 Foreign accommodation and subsistence costs and expenses (overseas | |
employments) | |
(1) A deduction from earnings from an employment is allowed if— | |
(a) the duties of the employment are performed wholly outside the United | 40 |
Kingdom, | |
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(b) the employee is resident and ordinarily resident in the United | |
Kingdom, | |
(c) in a case where the employer is a foreign employer, the employee is | |
domiciled in the United Kingdom, and | |
(d) the earnings include an amount in respect of— | 5 |
(i) the provision of accommodation or subsistence outside the | |
United Kingdom for the employee for the purpose of enabling | |
the employee to perform the duties of the employment, or | |
(ii) the reimbursement of expenses incurred by the employee on | |
such accommodation or subsistence for that purpose. | 10 |
(2) If the accommodation or subsistence is wholly for that purpose, the deduction | |
is equal to the included amount. | |
(3) If the accommodation or subsistence is only partly for that purpose, the | |
deduction is equal to so much of the included amount as is properly | |
attributable to that purpose. | 15 |
Personal security assets and services | |
377 Costs and expenses in respect of personal security assets and services | |
(1) This section applies if— | |
(a) there is a special threat to an employee’s personal physical security | |
which arises wholly or mainly because of the employee’s employment, | 20 |
(b) an asset or service which improves personal security is provided for or | |
used by the employee to meet the threat, | |
(c) the employee’s earnings include an amount in respect of— | |
(i) the provision or use, or | |
(ii) expenses connected with it, | 25 |
because the whole or part of the cost of the provision or use is borne, or | |
the expenses are reimbursed to the employee, by or on behalf of | |
another person (“the provider”), and | |
(d) the provider’s sole object in bearing the whole or part of the cost or | |
reimbursing the expenses is meeting the threat. | 30 |
(2) In the case of such an asset, if the provider intends it to be used solely for the | |
purpose of improving personal physical security, a deduction equal to the | |
included amount is allowed. | |
(3) If the provider intends the asset to be used solely to improve personal physical | |
security, any use of the asset incidental to that purpose is ignored. | 35 |
(4) If the provider intends the asset to be used only partly to improve personal | |
physical security, a deduction equal to the proportion of the included amount | |
attributable to the intended use for that purpose is allowed. | |
(5) In determining whether or not this section applies in relation to an asset, it does | |
not matter if— | 40 |
(a) the asset becomes fixed to land (even a dwelling or grounds), or | |
(b) the employee is or becomes entitled— | |
(i) to the property in the asset, or | |
(ii) if the asset is a fixture, to any estate or interest in the land | |
concerned. | 45 |
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(6) In the case of a service within subsection (1), if the benefit resulting to the | |
employee consists wholly or mainly of an improvement of the employee’s | |
personal physical security, a deduction equal to the included amount is | |
allowed. | |
(7) The fact that an asset or a service improves the personal physical security of a | 5 |
member of the employee’s family or household, as well as that of the | |
employee, does not prevent a deduction being allowed. | |
(8) In this section— | |
“asset” includes equipment or a structure (such as a wall), but not a car, | |
ship or aircraft or a dwelling or grounds appurtenant to a dwelling, and | 10 |
“service” does not include a dwelling or grounds appurtenant to a | |
dwelling. | |
Chapter 6 | |
Deductions from seafarers’ earnings | |
378 Deduction from seafarers’ earnings: eligibility | 15 |
(1) A deduction is allowed from earnings from an employment as a seafarer if— | |
(a) the earnings are taxable earnings under section 15 or 21 (earnings for | |
year when employee resident and ordinarily resident in UK), | |
(b) the duties of the employment are performed wholly or partly outside | |
the United Kingdom, and | 20 |
(c) any of those duties are performed in the course of an eligible period. | |
(2) In this Chapter “eligible period” means a period consisting of at least 365 days | |
which is either— | |
(a) a period of consecutive days of absence from the United Kingdom, or | |
(b) a combined period. | 25 |
(3) A combined period is a period— | |
(a) at least half of the days in which are days of absence from the United | |
Kingdom, and | |
(b) which consists of 3 consecutive periods, A, B and C, where— | |
A is a period of consecutive days of absence from the United Kingdom or | 30 |
a period which is itself a combined period, | |
B is a period of not more than 183 days, and | |
C is a period of consecutive days of absence from the United Kingdom. | |
(4) For this purpose a person is only regarded as being absent from the United | |
Kingdom on any day if absent at the end of the day. | 35 |
379 Calculating the deduction | |
(1) The deduction under section 378— | |
(a) is allowed from the amount of the earnings from the employment | |
attributable to the eligible period, and | |
(b) is equal to that amount. | 40 |
(2) Earnings from the employment for a period of leave immediately after the | |
eligible period are to be regarded as earnings attributable to the eligible period | |
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(2) if or to the extent that they are earnings for the tax year in which the eligible | |
period ends. | |
(3) This section is subject to section 380 (limit on deduction where UK duties etc. | |
make amount unreasonable). | |
380 Limit on deduction where UK duties etc. make amount unreasonable | 5 |
(1) If— | |
(a) section 378 (deduction from seafarers’ earnings: eligibility) applies to | |
earnings for a tax year, and | |
(b) in the tax year the employee performs some of the duties of the | |
employment as a seafarer or of any associated employments in the | 10 |
United Kingdom, | |
the amount of earnings in respect of which the deduction under this Chapter is | |
allowed is subject to the following limitation. | |
(2) The amount is restricted to the proportion of the aggregate earnings for that | |
year from the employment as a seafarer and all associated employments that is | 15 |
reasonable having regard to— | |
(a) the nature of and time devoted to the duties performed outside and in | |
the United Kingdom, and | |
(b) all other relevant circumstances. | |
(3) In this section “associated employments” means employments with the same | 20 |
employer or with associated employers. | |
(4) The same rules for determining whether employers are associated apply for | |
the purposes of this section as apply for section 24(4) (limit on chargeable | |
overseas earnings where duties of associated employment performed in UK) | |
(see section 24(5)). | 25 |
381 Taking account of other deductions | |
For the purposes of sections 379 and 380, the amount of the earnings from an | |
employment for a tax year is the amount remaining after any deductions under— | |
(a) section 232 (giving effect to mileage allowance relief), | |
(b) Chapter 2, 3, 4 or 5 of this Part, | 30 |
(c) section 592(7) of ICTA (contributions to exempt approved schemes), | |
(d) section 594(1) of ICTA (contributions to exempt statutory schemes), | |
and | |
(e) section 262 of CAA 2001 (capital allowances to be given effect by | |
treating them as deductions from earnings). | 35 |
382 Duties on board ship | |
(1) Duties which a person performs on a ship engaged— | |
(a) on a voyage beginning or ending outside the United Kingdom (but | |
excluding any part of it beginning and ending in the United Kingdom), | |
or | 40 |
(b) on a part beginning or ending outside the United Kingdom of any other | |
voyage, | |
are treated as performed outside the United Kingdom for the purposes of this | |
Chapter. | |
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(2) For this purpose the areas designated under section 1(7) of the Continental | |
Shelf Act 1964 (c. 29) are treated as part of the United Kingdom. | |
(3) Subsection (1) applies despite anything to the contrary in section 40 (duties on | |
board vessel or aircraft). | |
383 Place of performance of incidental duties | 5 |
(1) For the purposes of section 378(1)(b) (deduction from seafarers’ earnings: | |
eligibility), duties of an employment as a seafarer which are performed outside | |
the United Kingdom are treated as performed in the United Kingdom if | |
conditions A and B are met. | |
(2) Condition A is that in the tax year in which the duties are performed the | 10 |
employment is in substance one whose duties fall to be performed in the | |
United Kingdom. | |
(3) Condition B is that the performance of the duties performed outside the United | |
Kingdom is merely incidental to the performance of duties in the United | |
Kingdom. | 15 |
(4) Section 39 (duties in UK merely incidental to duties outside UK) does not affect | |
the question— | |
(a) where any duties are performed, or | |
(b) whether a person is absent from the United Kingdom, | |
for the purposes of section 378(1) to (3). | 20 |
384 Meaning of employment “as a seafarer” | |
In this Chapter employment “as a seafarer” means an employment consisting | |
of the performance of duties on a ship or of such duties and others incidental | |
to them. | |
385 Meaning of “ship” | 25 |
In this Chapter “ship” does not include— | |
(a) any offshore installation within the meaning of the Mineral Workings | |
(Offshore Installations) Act 1971 (c.61), or | |
(b) what would be such an installation if the references in that Act to | |
controlled waters were to any waters. | 30 |
Part 6 | |
Employment income: income which is not earnings or share-related | |
Chapter 1 | |
Payments to non-approved pension schemes | |
386 Charge on payments to non-approved retirement benefits schemes | 35 |
(1) A sum paid by an employer— | |
(a) in accordance with a non-approved retirement benefits scheme, and | |
(b) with a view to the provision of relevant benefits for or in respect of an | |
employee of the employer, | |
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counts as employment income of the employee for the relevant tax year. | |
(2) The “relevant tax year” is the tax year in which the sum is paid. | |
(3) Subsection (1) does not apply if or to the extent that the sum is chargeable to | |
income tax as the employee’s income apart from this section. | |
(4) But if, apart from this section, the payment of the sum would be a payment to | 5 |
which Chapter 3 of this Part (payments and benefits on termination of | |
employment etc.) would apply, subsection (1) applies to the sum (and | |
accordingly that Chapter does not apply to it). | |
(5) In this Chapter— | |
(a) “employee” includes a person who is to be or has been an employee, | 10 |
(b) section 5(1) (application to offices) does not apply, but “employee”, in | |
relation to a company, includes any officer or director of the company | |
and any other person taking part in the management of the affairs of the | |
company, | |
(c) “employer” and “employment” have meanings corresponding to the | 15 |
meaning of “employee” given by paragraphs (a) and (b), | |
(d) “director” has the meaning given by section 612(1) of ICTA, and | |
(e) “relevant benefits” has the meaning given by that section and section | |
612(2) of ICTA applies to references in this Chapter to the provision of | |
relevant benefits as it applies to such references in Chapter 1 of Part 14 | 20 |
of ICTA. | |
(6) For the purposes of this Chapter benefits are provided in respect of an | |
employee if they are provided for the employee’s spouse, widow or widower, | |
children, dependants or personal representatives. | |
(7) Any liability to tax arising by virtue of this section is subject to the reliefs given | 25 |
under— | |
(a) section 392 (relief where no benefits are paid or payable), and | |
(b) section 266A of ICTA (life assurance premiums paid by employer). | |
387 Meaning of “non-approved retirement benefits scheme” | |
(1) In this Chapter “retirement benefits scheme” has the meaning given by section | 30 |
611 of ICTA. | |
(2) For the purposes of this Chapter, a retirement benefits scheme is “non- | |
approved” unless it is— | |
(a) an approved scheme, | |
(b) a relevant statutory scheme, or | 35 |
(c) a scheme set up by a government outside the United Kingdom for the | |
benefit of its employees or primarily for their benefit. | |
(3) In this section— | |
“approved scheme” has the meaning given by section 612(1) of ICTA, and | |
“relevant statutory scheme” has the meaning given by section 611A of | 40 |
ICTA. | |
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