- Latest available (Revised)
- Point in Time (01/12/2012)
- Original (As enacted)
Version Superseded: 10/05/2013
Point in time view as at 01/12/2012.
Income Tax (Earnings and Pensions) Act 2003, Part 5 is up to date with all changes known to be in force on or before 25 August 2024. There are changes that may be brought into force at a future date. Changes that have been made appear in the content and are referenced with annotations.
Changes and effects yet to be applied by the editorial team are only applicable when viewing the latest version or prospective version of legislation. They are therefore not accessible when viewing legislation as at a specific point in time. To view the ‘Changes to Legislation’ information for this provision return to the latest version view using the options provided in the ‘What Version’ box above.
(1)This Part provides for deductions that are allowed from the taxable earnings from an employment in a tax year in calculating the net taxable earnings from the employment in the tax year for the purposes of Part 2 (see section 11(1)).
(2)In this Part, unless otherwise indicated by the context—
(a)references to the earnings from which deductions are allowed are references to the taxable earnings mentioned in subsection (1), and
(b)references to the tax year are references to the tax year mentioned there.
(3)The deductions for which this Part provides are those allowed under—
Chapter 2 (deductions for employee’s expenses),
Chapter 3 (deductions from benefits code earnings),
Chapter 4 (fixed allowances for employee’s expenses),
Chapter 5 (deductions for earnings representing benefits or reimbursed expenses), and
Chapter 6 (deductions from seafarers' earnings).
(4)Further provision about deductions from earnings is made in—
section 232 (giving effect to mileage allowance relief),
F1... and
section 262 of CAA 2001 (capital allowances to be given effect by treating them as deductions from earnings).
(5)Further provision about deductions from income including earnings is made in—
Part 12 (payroll giving), [F2and
sections 188 to 194 of FA 2004 (contributions to registered pension schemes).]
Textual Amendments
F1Words in s. 327(4) repealed (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 35 para. 60(2), Sch. 42 Pt. 3 (with Sch. 36)
F2Words in s. 327(5) substituted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 35 para. 60(3) (with Sch. 36)
(1)The general rule is that deductions under this Part are allowed—
(a)from any earnings from the employment in question, and
(b)not from earnings from any other employment.
This is subject to subsections (2) to (4).
(2)Deductions under section 351 (expenses of ministers of religion) are allowed from earnings from any employment as a minister of a religious denomination.
(3)Deductions under section 368 (fixed sum deductions from earnings payable out of public revenue) are allowed only from earnings payable out of the public revenue.
(4)Deductions limited to specified earnings (see subsection (5)) are allowed—
(a)only from earnings from the employment that are taxable earnings under certain of the charging provisions of Chapters 4 and 5 of Part 2, and
(b)not from other earnings from it.
(5)“Deductions limited to specified earnings” are deductions under—
sections 336 to 342 (deductions from earnings charged on receipt: see sections 335(2) and 354),
section 353 (deductions from earnings charged on remittance),
sections 370 to 374 (travel deductions from earnings charged on receipt), and
Chapter 6 of this Part (deductions from seafarers' earnings: see section 378(1)(a)).
(1)The amount of a deduction allowed under this Part may not exceed the earnings from which it is deductible.
(2)If two or more deductions allowed under this Part are deductible from the same earnings, the amounts deductible may not in aggregate exceed those earnings.
(3)If deductions allowed otherwise than under this Part fall to be allowed from the same earnings as amounts deductible under this Part, the amounts deductible under this Part may not exceed the earnings remaining after the other deductions.
(4)Subsections (1) and (2) do not apply to a deduction under section 351 (expenses of ministers of religion), and subsection (3) applies as if such a deduction were allowed otherwise than under this Part.
(5)This section is to be disregarded for the purposes of the deductibility provisions (see section 332).
(6)See also [F3section 128 of ITA 2007] (which provides that where a loss in an employment is sustained, relief may be given against other income).
Textual Amendments
F3Words in s. 329(6) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 434 (with Sch. 2)
(1)A deduction from earnings under this Part is not allowed more than once in respect of the same costs or expenses.
(2)If apart from this subsection—
(a)a deduction would be allowed under Chapter 4 of this Part (fixed allowances for employee’s expenses) for a sum fixed by reference to any kind of expenses, and
(b)the employee would be entitled under another provision to a deduction for an amount paid in respect of the same kind of expenses,
only one of those deductions is allowed.
(1)This Part needs to be read with [F4section 25(1) to (3) of ITA 2007] (general rule that deductions are to be allowed in the order resulting in the greatest reduction of liability to income tax).
(2)In the case of deductions under this Part, the general rule in that section is subject to—
(a)section 23(3) (which requires certain deductions to be made in order to establish “chargeable overseas earnings”), and
(b)section 381 (which requires deductions under other provisions to be taken into account before deductions under Chapter 6 of this Part (seafarers)).
Textual Amendments
F4Words in s. 331(1) substituted (with effect in accordance with s. 381(1) of the amending Act) by Taxation (International and Other Provisions) Act 2010 (c. 8), s. 381(1), Sch. 8 para. 300 (with Sch. 9 paras. 1-9, 22)
For the purposes of this Part, “the deductibility provisions” means the following provisions (which refer to amounts or expenses that would be deductible if they were incurred and paid by an employee)—
the definition of “business travel” in section 171(1) (definitions for Chapter 6 of Part 3),
section 179(6) (exception for certain advances for necessary expenses),
the definition of “business travel” in section 236(1) (definitions for Chapter 2 of Part 4),
section 240(1)(c) and (5) (exemption of incidental overnight expenses and benefits),
section 252(3) (exception from exemption of work-related training provision for non-deductible travel expenses),
section 257(3) (exception from exemption for individual learning account training provision for non-deductible travel expenses),
section 305(5) (offshore oil and gas workers: mainland transfers),
section 310(6)(b) (counselling and other outplacement services),
section 311(5)(b) (retraining courses),
section 361(b) (scope of Chapter 3 of this Part: cost of benefits deductible as if paid by employee),
section 362(1)(c) and (2)(b) (deductions where non-cash voucher provided),
section 363(1)(b) and (2)(b) (deductions where credit-token provided),
section 364(1)(b) and (2) (deductions where living accommodation provided),
section 365(1)(b) and (2) (deductions where employment-related benefit provided).
Modifications etc. (not altering text)
C1Pt. 5 Ch. 2 restricted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 33 para. 1(5) (with Sch. 36)
(1)A deduction from a person’s earnings for an amount is allowed under the following provisions of this Chapter only if the amount—
(a)is paid by the person, or
(b)is paid on the person’s behalf by someone else and is included in the earnings.
(2)In the following provisions of this Chapter, in relation to a deduction from a person’s earnings, references to the person paying an amount include references to the amount being paid on the person’s behalf by someone else if or to the extent that the amount is included in the earnings.
(3)Subsection (1)(b) does not apply to the deductions under—
(a)section 351(2) and (3) (expenses of ministers of religion), and
(b)section 355 (deductions for corresponding payments by non-domiciled employees with foreign employers),
and subsection (2) does not apply in the case of those deductions.
(4)Chapter 3 of this Part provides for deductions where—
(a)a person’s earnings include an amount treated as earnings under Chapter 4, 5 or 10 of Part 3 (taxable benefits: vouchers etc., living accommodation and residual liability to charge), and
(b)an amount in respect of the benefit in question would be deductible under this Chapter if the person had incurred and paid it.
(1)For the purposes of this Chapter, a person may be regarded as paying an amount despite—
(a)its reimbursement, or
(b)any other payment from another person in respect of the amount.
(2)But where a reimbursement or such other payment is made in respect of an amount, a deduction for the amount is allowed under the following provisions of this Chapter only if or to the extent that—
(a)the reimbursement, or
(b)so much of the other payment as relates to the amount,
is included in the person’s earnings.
(3)This section does not apply to a deduction allowed under section 351 (expenses of ministers of religion).
(4)This section is to be disregarded for the purposes of the deductibility provisions.
(1)The availability of certain deductions under this Chapter depends on whether the earnings are earnings charged on receipt or earnings charged on remittance.
(2)Sections 336 to 342—
(a)only apply if the earnings from which the deduction is to be made are earnings charged on receipt, and
(b)apply subject to section 354(1) if the earnings from the employment also include other earnings.
(3)Section 353 (which provides for a deduction for expenses of the kind to which sections 336 to 342 apply)—
(a)only applies if the earnings from which the deduction is to be made are earnings charged on remittance, and
(b)applies subject to section 354(2) if the earnings from the employment also include other earnings.
(4)In this Part—
“earnings charged on receipt” means earnings which are taxable earnings under section 15F5... or 27, and
“earnings charged on remittance” means earnings which are taxable earnings under section 22 or 26.
Textual Amendments
F5Words in s. 335(4) omitted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by virtue of Finance Act 2008 (c. 9), Sch. 7 para. 26
(1)The general rule is that a deduction from earnings is allowed for an amount if—
(a)the employee is obliged to incur and pay it as holder of the employment, and
(b)the amount is incurred wholly, exclusively and necessarily in the performance of the duties of the employment.
(2)The following provisions of this Chapter contain additional rules allowing deductions for particular kinds of expenses and rules preventing particular kinds of deductions.
(3)No deduction is allowed under this section for an amount that is deductible under sections 337 to 342 (travel expenses).
(1)A deduction from earnings is allowed for travel expenses if—
(a)the employee is obliged to incur and pay them as holder of the employment, and
(b)the expenses are necessarily incurred on travelling in the performance of the duties of the employment.
(2)This section needs to be read with section 359 (disallowance of travel expenses: mileage allowances and reliefs).
(1)A deduction from earnings is allowed for travel expenses if—
(a)the employee is obliged to incur and pay them as holder of the employment, and
(b)the expenses are attributable to the employee’s necessary attendance at any place in the performance of the duties of the employment.
(2)Subsection (1) does not apply to the expenses of ordinary commuting or travel between any two places that is for practical purposes substantially ordinary commuting.
(3)In this section “ordinary commuting” means travel between—
(a)the employee’s home and a permanent workplace, or
(b)a place that is not a workplace and a permanent workplace.
(4)Subsection (1) does not apply to the expenses of private travel or travel between any two places that is for practical purposes substantially private travel.
(5)In subsection (4) “private travel” means travel between—
(a)the employee’s home and a place that is not a workplace, or
(b)two places neither of which is a workplace.
(6)This section needs to be read with section 359 (disallowance of travel expenses: mileage allowances and reliefs).
(1)In this Part “workplace”, in relation to an employment, means a place at which the employee’s attendance is necessary in the performance of the duties of the employment.
(2)In this Part “permanent workplace”, in relation to an employment, means a place which—
(a)the employee regularly attends in the performance of the duties of the employment, and
(b)is not a temporary workplace.
This is subject to subsections (4) and (8).
(3)In subsection (2) “temporary workplace”, in relation to an employment, means a place which the employee attends in the performance of the duties of the employment—
(a)for the purpose of performing a task of limited duration, or
(b)for some other temporary purpose.
This is subject to subsections (4) and (5).
(4)A place which the employee regularly attends in the performance of the duties of the employment is treated as a permanent workplace and not a temporary workplace if—
(a)it forms the base from which those duties are performed, or
(b)the tasks to be carried out in the performance of those duties are allocated there.
(5)A place is not regarded as a temporary workplace if the employee’s attendance is—
(a)in the course of a period of continuous work at that place—
(i)lasting more than 24 months, or
(ii)comprising all or almost all of the period for which the employee is likely to hold the employment, or
(b)at a time when it is reasonable to assume that it will be in the course of such a period.
(6)For the purposes of subsection (5), a period is a period of continuous work at a place if over the period the duties of the employment are performed to a significant extent at the place.
(7)An actual or contemplated modification of the place at which duties are performed is to be disregarded for the purposes of subsections (5) and (6) if it does not, or would not, have any substantial effect on the employee’s journey, or expenses of travelling, to and from the place where they are performed.
(8)An employee is treated as having a permanent workplace consisting of an area if—
(a)the duties of the employment are defined by reference to an area (whether or not they also require attendance at places outside it),
(b)in the performance of those duties the employee attends different places within the area,
(c)none of the places the employee attends in the performance of those duties is a permanent workplace, and
(d)the area would be a permanent workplace if subsections (2), (3), (5), (6) and (7) referred to the area where they refer to a place.
(1)A deduction from earnings from an employment is allowed for travel expenses if conditions A to D are met.
(2)Condition A is that the employee is obliged to incur and pay the expenses.
(3)Condition B is that the travel is for the purpose of performing duties of the employment at the destination.
(4)Condition C is that the employee has performed duties of another employment at the place of departure.
(5)Condition D is that the employments are with companies in the same group.
(6)In this section “group” means a company and its 51% subsidiaries.
(7)For the purposes of sections 353 and 354 (special rules for earnings with a foreign element), the expenses are treated as incurred in the performance of the duties to be performed at the destination.
(8)This section needs to be read with section 359 (disallowance of travel expenses: mileage allowances and reliefs).
(1)A deduction from earnings from an employment is allowed for starting travel expenses and finishing travel expenses if conditions A to C are met.
(2)Condition A is that the duties of the employment are performed wholly outside the United Kingdom.
(3)Condition B is that the employee is resident and ordinarily resident in the United Kingdom.
(4)Condition C is that in a case where the employer is a foreign employer, the employee is domiciled in the United Kingdom.
(5)If the travel is only partly attributable to the taking up or termination of the employment, this section applies only to the part of the expenses properly so attributable.
(6)Subsection (7) applies if in the tax year the employment is in substance one whose duties fall to be performed outside the United Kingdom.
(7)Duties of the employment performed in the United Kingdom, whose performance is merely incidental to the performance of duties outside the United Kingdom, are to be treated for the purposes of subsection (2) as performed outside the United Kingdom.
(8)In this section—
“starting travel expenses” means expenses incurred by the employee in travelling from a place in the United Kingdom to take up the employment,
“finishing travel expenses” means expenses incurred by the employee in travelling to a place in the United Kingdom on the termination of the employment, and
“employee” includes a person who is to be, or has ceased to be, an employee.
(9)This section needs to be read with section 359 (disallowance of travel expenses: mileage allowances and reliefs).
(1)A deduction from earnings from an employment is allowed for travel expenses incurred by the employee if conditions A to F are met.
(2)Condition A is that the travel is for the purpose of performing duties of the employment at the destination.
(3)Condition B is that the employee has performed duties of another employment at the place of departure.
(4)Condition C is that the place of departure or the destination or both are outside the United Kingdom.
(5)Condition D is that the duties of one or both of the employments are performed wholly or partly outside the United Kingdom.
(6)Condition E is that the employee is resident and ordinarily resident in the United Kingdom.
(7)Condition F is that in a case where the employer is a foreign employer, the employee is domiciled in the United Kingdom.
(8)If the travel is only partly attributable to the purpose of performing duties of the employment at the destination, this section applies only to the part of the expenses properly so attributable.
(9)This section needs to be read with section 359 (disallowance of travel expenses: mileage allowances and reliefs).
(1)A deduction from earnings from an employment is allowed for an amount paid in respect of a professional fee if—
(a)the duties of the employment involve the practice of the profession to which the fee relates, and
(b)the registration, certification, licensing or other matter in respect of which the fee is payable is a condition, or one of alternative conditions, which must be met if that profession is to be practised in the performance of those duties.
(2)In this section “professional fee” means a fee mentioned in the following Table.
Table
Health professionals
1.Fee payable for entry or retention of a name in any of the following—
F6(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b)the register maintained by the Registrar of Chiropractors,
[F7(c) the dental care professionals register,]
(d)the dentists register,
(e)the register of dispensing opticians,
(f)the register maintained by [F8the Health and Care Professions Council] ,
F9(g). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(h)the register of medical practitioners,
(i)the register maintained by the Nursing and Midwifery Council,
(j)either of the registers of opthalmic opticians,
(k)the register maintained by the Registrar of Osteopaths,
[F10(l) the register maintained under article 19 of the Pharmacy Order 2010 so far as relating to pharmacists or pharmacy technicians,]
[F11(n)the register of pharmaceutical chemists kept under Articles 6 and 9 of the Pharmacy (Northern Ireland) Order 1976.]
F12[F13(o). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(p)the register maintained by the Care Council for Wales,
(q)the register maintained by the Scottish Social Services Council,
(r)the register maintained by the Northern Ireland Social Care Council.]
F6 2.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
3.Fee payable for entry or retention of a name in any of the following—
(a)the register maintained by the registrar appointed by the Farriers Registration Council,
(b)the supplementary veterinary register,
(c)the register of veterinary surgeons.
[F14(d)the register maintained by the Animal Medicines Training Regulatory Authority pursuant to paragraph 13 of Schedule 3 to the Veterinary Medicines Regulations 2006.]
Legal professionals
4.Fee payable to the Council for Licensed Conveyancers on the issue of a licence to practise as a licensed conveyancer.
5.Fee and contribution to the compensation fund or Guarantee Fund payable on the issue of a solicitor’s practising certificate.
Architects
6.Fee payable for entry or retention of a name in the Register of Architects.
Teachers
7.Fee payable for entry or retention of a name in any of the following—
F15(a). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(b)the register maintained by the General Teaching Council for Scotland,
(c)the register maintained by the General Teaching Council for Wales.
[F16(d)the register maintained by the General Teaching Council for Northern Ireland.]
[F17Patent attorneys] and [F18trade mark attorneys]
8.Registration fee payable by—
(a)a registered [F17patent attorney],
(b)a registered [F18trade mark attorney].
9.Practising fee payable by—
(a)a registered [F17patent attorney],
(b)a registered [F18trade mark attorney].
Occupations in the transport sector
10.Fee payable by a driving instructor for entry or retention of a name in the register of approved instructors or on the issue or renewal of a licence authorising its holder to give paid instruction in the driving of a motor car.
11.Fee (including any related medical or technical examination fee) payable, on the issue or renewal of a licence by the Civil Aviation Authority, by—
(a)an aircraft maintenance engineer,
(b)an air traffic controller or student air traffic controller,
(c)a member of the flight crew of an aircraft registered in the United Kingdom,
(d)a flight information service officer.
12.Fee (including any related medical examination fee) payable—
(a)on the issue or renewal of a licence authorising its holder to drive a large goods vehicle or a passenger-carrying vehicle,
(b)by an officer or other seaman on the issue, renewal or endorsement of a certificate, licence or other document which is required as evidence of his qualification or competence to serve in a ship.
13.Fee payable by a seafarer employed in a sea-going United Kingdom ship on the issue or renewal of a medical fitness certificate.
[F19 14.Fee payable by a person employed or to be employed at a United Kingdom airport for a criminal records check required for the issue of a security pass authorising him to enter areas within the airport.]
[F20Occupations in the private security industry
15.Fee payable on applying for a licence from the Security Industry Authority under the Private Security Industry Act 2001.]
[F21Occupations in the gambling industry
16.Fee payable—
(a)on applying for a personal licence from the Gambling Commission under the Gambling Act 2005, or
(b)on applying to vary such a licence.
17.Any fee payable to the Gambling Commission under section 132 of that Act.]
(3)The Board of Inland Revenue may make an order adding such fee as is specified in the order to the Table of fees mentioned in subsection (2).
(4)The [F22Commissioners] may make an order if they consider that such fee is payable in respect of any registration, certification, licensing or other matter if it is required as a condition, or one of alternative conditions, of the practice of a profession.
Textual Amendments
F6Words in S. 343(2) Table omitted (6.4.2010) by virtue of The Health Care and Associated Professions (Miscellaneous Amendments and Practitioner Psychologists) Order 2009 (S.I. 2009/1182), art. 1(9), Sch. 5 para. 6 (with arts. 9, 10); S.I. 2009/1357, art. 2(3)
F7Words in s. 343(2) substituted (31.7.2006 - see the London Gazette, issue no. 58050 dated 21.7.2006) by The Dentists Act 1984 (Amendment) Order 2005 (S.I. 2005/2011), art. 1(4)-(7), Sch. 6 para. 5 (with Sch. 7) (with transitional provisions in S.I. 2006/1671)
F8Words in section 343(2) Table substituted (1.8.2012) by Health and Social Care Act 2012 (c. 7), s. 306(4), Sch. 15 para. 56(d); S.I. 2012/1319, art. 2(4)
F9Words in s. 343(2) repealed (1.4.2010) by Health and Social Care Act 2008 (c. 14), s. 170(3)(4), Sch. 15 Pt. 2; S.I. 2010/708, art. 4(2)(d)
F10Words in s. 343(2) substituted (27.9.2010) by The Pharmacy Order 2010 (S.I. 2010/231), art. 1(5), Sch. 4 para. 11; S.I. 2010/1621, art. 2(1)
F11Words in s. 343(2) Table substituted (coming into force in accordance with art. 1(2)(3) of the amending S.I.) by The Pharmacists and Pharmacy Technicians Order 2007 (S.I. 2007/289), art. 1(2)(3), Sch. 1 para. 9 (which substitution is, as respects para. (n), continued (11.2.2010) by The Pharmacy Order 2010 (S.I. 2010/231), art. 1(2)(c), Sch. 6 para. 2)
F12Words in section 343(2) Table omitted (1.8.2012) by virtue of Health and Social Care Act 2012 (c. 7), s. 306(4), Sch. 15 para. 51; S.I. 2012/1319, art. 2(4); S.I. 2012/1319, art. 2(4)
F13Words in s. 343(2) Table added (6.4.2008) by The Income Tax (Professional Fees) Order 2008 (S.I. 2008/836), arts. 1, 2(2)
F14Words in s. 343(2) Table added (6.4.2008) by The Income Tax (Professional Fees) Order 2008 (S.I. 2008/836), arts. 1, 2(3)
F15Words in s. 343(2) omitted (1.4.2012) by virtue of Education Act 2011 (c. 21), s. 82(3), Sch. 2 para. 26; S.I. 2012/924, art. 2
F16Words in s. 343(2) added (6.4.2005) by The Income Tax (Professional Fees) Order 2005 (S.I. 2005/1091), arts. 1, 2
F17Words in s. 343(2) substituted (1.1.2010) by Legal Services Act 2007 (c. 29), s. 211(2), Sch. 21 para. 137(a) (with ss. 29, 192, 193); S.I. 2009/3250, art. 2(h)
F18Words in s. 343(2) substituted (1.1.2010) by Legal Services Act 2007 (c. 29), s. 211(2), Sch. 21 para. 137(b) (with ss. 29, 192, 193); S.I. 2009/3250, art. 2(h)
F19Words in s. 343(2) added (1.7.2003) by The Income Tax (Professional Fees) Order 2003 (S.I. 2003/1652), arts. 1, 2
F20Words in s. 343(2) added (17.5.2004) by The Income Tax (Professional Fees) Order 2004 (S.I. 2004/1360), arts. 1, 2
F21Words in s. 343(2) Table inserted (1.12.2012) by The Income Tax (Professional Fees) Order 2012 (S.I. 2012/3004), arts. 1, 2
F22Words in s. 343 substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 102(2)(3)(e); S.I. 2005/1126, art. 2(2)(h)
Modifications etc. (not altering text)
C2S. 343(2) amendment continued (11.2.2010) by The Pharmacy Order 2010 (S.I. 2010/231), art. 1(2)(c), Sch. 6 para. 2
(1)A deduction from earnings from an employment is allowed for an amount paid in respect of an annual subscription if—
(a)it is paid to a body of persons approved under this section, and
(b)the activities of the body which are directed to one or more of the objects within subsection (2) are of direct benefit to, or concern the profession practised in, the performance of the duties of the employment.
(2)The objects are—
(a)the advancement or dissemination of knowledge (whether generally or among persons belonging to the same or similar professions or occupying the same or similar positions),
(b)the maintenance or improvement of standards of conduct and competence among the members of a profession,
(c)the provision of indemnity or protection to members of a profession against claims in respect of liabilities incurred by them in the exercise of their profession.
(3)[F23An officer of Revenue and Customs] may approve a body of persons under this section if, on an application by the body, [F24the officer] [F25is satisfied] that—
(a)the body is not of a mainly local character,
(b)its activities are carried on otherwise than for profit, and
(c)its activities are wholly or mainly directed to objects within subsection (2).
(4)[F23An officer of Revenue and Customs] must give notice to the body of their decision on the application.
(5)If the activities of the body are to a significant extent directed to objects other than objects within subsection (2), [F23an officer of Revenue and Customs] may—
(a)determine the proportion of the activities directed to objects within subsection (2), and
(b)determine that only such corresponding part of the subscription as is specified by [F23an officer of Revenue and Customs] is allowable under this section.
(6)In determining that part, [F23an officer of Revenue and Customs] must have regard to the proportion of expenditure of the body attributable to objects other than objects within subsection (2) and all other relevant circumstances.
(7)If a body applies for approval under this section and is approved, a subscription paid to it—
(a)before it has applied but in the same tax year as the application, or
(b)after it has applied but before it is approved,
is treated for the purposes of this section as having been paid to an approved body.
Textual Amendments
F23Words in Act substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 102(1); S.I. 2005/1126, art. 2(2)(h)
F24Words in s. 344(3) substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 103(1)(g); S.I. 2005/1126, art. 2(2)(h)
F25Words in s. 344(3) substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 112; S.I. 2005/1126, art. 2(2)(h)
(1)[F23An officer of Revenue and Customs] may by notice to the body in question—
(a)withdraw an approval given under section 344, and
(b)withdraw or vary a determination made under that section,
to take account of any change in circumstances.
(2)A body aggrieved by a decision of [F23an officer of Revenue and Customs] under section 344 or subsection (1) may appeal F26....
(3)The notice of appeal must be given to [F23an officer of Revenue and Customs] within 30 days after the date on which notice of their decision was given to the body.
Textual Amendments
F23Words in Act substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 102(1); S.I. 2005/1126, art. 2(2)(h)
F26Words in s. 345(2) omitted (1.4.2009) by virtue of The Transfer of Tribunal Functions and Revenue and Customs Appeals Order 2009 (S.I. 2009/56), art. 1(2), Sch. 1 para. 337
(1)A deduction from earnings from an employment is allowed for any or all of the following—
A. Payment in or towards the discharge of a liability related to the employment.
B. Payment of any costs or expenses incurred in connection with—
(a)a claim that the employee is subject to a liability related to the employment, or
(b)proceedings relating to or arising out of a claim that the employee is subject to a liability related to the employment.
C. Payment of a premium under a qualifying insurance contract, but only to the extent that the premium relates to—
(a)provision in the contract for the employee to be indemnified against a payment falling within paragraph A, or
(b)provision in the contract for the payment of any costs or expenses falling within paragraph B.
(2)But a deduction is not allowed for a payment which falls within paragraph A or B if it would be unlawful for the employer to enter into a contract of insurance in respect of the liability, or costs or expenses, in question.
[F27(2A)Nor is a deduction allowed for a payment which falls within paragraph A, B or C if the payment is made in pursuance of arrangements the main purpose, or one of the main purposes, of which is the avoidance of tax.]
(3)In this Chapter—
(a)“ ”, in relation to a qualifying insurance contract, means an amount payable to the insurer under the contract, and
(b)where a qualifying insurance contract relates to more than one person, employment or risk, the part of the premium to be treated as relating to each of them is to be determined by apportionment on a just and reasonable basis.
Textual Amendments
F27S. 346(2A) inserted (with effect in accordance with s. 67(4) of the amending Act) by Finance Act 2009 (c. 10), s. 67(2)
(1)A deduction for a payment is not allowed under section 346 if—
(a)the employee has ceased to hold the employment, and
(b)the payment is made after the day on which the employee ceased to hold the employment.
(2)If subsection (1) applies, see section 555 (former employee entitled to deduction [F28in calculating net income]).
Textual Amendments
F28Words in s. 347(2) substituted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 435 (with Sch. 2)
For the purposes of this Chapter each of the following kinds of liability is related to the employment— A. Liability imposed upon the employee because he did an act, or failed to do an act—
(a)in his capacity as holder of the employment, or
(b)in any other capacity in which he acted in the performance of the duties of the employment.
B. Liability imposed upon the employee in connection with any proceedings relating to, or arising from, a claim that he is subject to a liability because he did an act, or failed to do an act—
(a)in his capacity as holder of the employment, or
(b)in any other capacity in which he acted in the performance of the duties of the employment.
(1)In section 346 “qualifying insurance contract” means a contract of insurance which meets conditions A, B, C and D.
(2)Condition A is that, so far as the risks insured against are concerned, the contract only relates to one or more of the following—
(a)the indemnification of an employee against a liability related to the employment,
(b)the indemnification of a person against vicarious liability in respect of a liability related to another person’s employment,
(c)the payment of costs or expenses incurred—
(i)in connection with a claim that a person is subject to a liability to which the insurance relates, or
(ii)in connection with any proceedings relating to or arising out of a claim that a person is subject to a liability to which the insurance relates,
(d)the indemnification of an employer against loss from a payment made by the employer to an employee in respect of—
(i)a liability related to the employment, or
(ii)any costs or expenses incurred as mentioned in paragraph (c).
(3)Condition B is that—
(a)the period of insurance under the contract does not exceed 2 years or, if it does, it does so only because of one or more renewals, each for a period of 2 years or less, and
(b)the insured is not required to renew the contract for any period.
(4)Condition C is—
(a)that the insured is not entitled under the contract to receive any payment or other benefit in addition to—
(i)cover for the risks insured against, and
(ii)any right to renew the contract, or
(b)if the insured is so entitled, that the part of the premium reasonably attributable to the entitlement is not a significant part of the whole premium.
(5)Condition D is that the contract is not connected with another contract.
(1)An insurance contract is connected with another contract for the purposes of section 349 if conditions E and F are met—
(a)at the time when both contracts are first in force, or
(b)at any time after that time.
(2)Condition E is that one of the contracts was entered into—
(a)by reference to the other, or
(b)with a view to enabling or facilitating entry into the other on particular terms.
(3)Condition F is that the terms on which one of the contracts was entered into are significantly different from what they would have been if—
(a)it had not been entered into in anticipation of the other being entered into, or
(b)the other had not also been entered into.
(4)If—
(a)there is only one such significant difference in terms, and
(b)the contracts meet conditions A, B and C specified in section 349,
the difference may be disregarded in the following cases.
(5)The first case is where the difference is a reduction in premiums under the contract that is reasonably attributable only to the contract—
(a)containing a right to renew, or
(b)being entered into by way of renewal.
(6)The second case is where—
(a)two or more contracts have been entered into as part of a single transaction, and
(b)the difference is reductions in their premiums that are reasonably attributable only to the premium under each of them having been fixed by reference to the appropriate proportion of the combined premium.
(7)In subsection (6) “ ” means the amount that would have been the total premium under a single contract relating to all the risks covered by the contracts.
(1)A deduction is allowed from any earnings from any employment as a minister of a religious denomination for amounts incurred by the minister wholly, exclusively and necessarily in the performance of duties of such an employment.
(2)If a minister of a religious denomination pays rent in respect of a dwelling-house, part of which is used mainly and substantially for the purposes of such duties, a deduction is allowed from the minister’s earnings from any employment as such a minister for—
(a)one quarter of the rent, or
(b)if less, the part of the rent that, on a just and reasonable apportionment, is attributable to that part of the dwelling-house.
(3)If—
(a)an interest in premises belongs to a charity or an ecclesiastical corporation, and
(b)because of that interest and by reason of holding an employment as a minister of a religious denomination, the minister has a residence in the premises from which to perform the duties of the employment,
a deduction is allowed from the minister’s earnings from any such employment for part of any expenses borne by the minister on the maintenance, repair, insurance or management of the premises.
(4)The amount of the deduction is—
where—
A is the amount of the expenses borne by the minister on the maintenance, repair, insurance or management of the premises, and
B is the amount of those expenses that are allowed under subsection (1).
F29(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(6)Subsection (1) needs to be read with section 359 (disallowance of travel expenses: mileage allowances and reliefs).
Textual Amendments
F29S. 351(5) omitted (coming into force for the tax year 2012-13 and subsequent tax years) by virtue of Finance Act 2010 (c. 13), Sch. 6 paras. 17(6), 34(2); S.I. 2012/736, art. 13
(1)A deduction is allowed from earnings from an employment as an entertainer for agency fees (and any value added tax on them) if the fees are calculated as a percentage of the whole or part of the earnings from the employment.
This is subject to the limit in subsection (2).
(2)Amounts may be deducted under this section in calculating the net taxable earnings from an employment in a tax year only to the extent that, in aggregate, they do not exceed 17.5% of the taxable earnings from the employment in the tax year.
(3)Subsections (4) and (5) apply for the purposes of this section.
(4)“Entertainer” means an actor, dancer, musician, singer or theatrical artist.
(5)“Agency fees”, in relation to an employment, means—
(a)fees paid under a contract between the employee and another person, to whom the fees are paid, who—
(i)agrees under the contract to act as an agent of the employee in connection with the employment, and
(ii)at the time the fees are paid is carrying on an employment agency with a view to profit, and
(b)fees paid under an arrangement under which a co-operative society or the members of such a society agree to act as the employee’s agent in connection with the employment.
(6)For the purposes of subsection (5)—
“co-operative society” does not include a society which carries on or intends to carry on business with the object of making profits mainly for the payment of interest, dividends or bonuses on money invested or deposited with or lent to the society or any other person, and
“employment agency” has the meaning given by section 13(2) of the Employment Agencies Act 1973 (c. 35).
(1)A deduction is allowed from earnings charged on remittance for expenses within subsection (2) if the condition in subsection (3) is met.
(2)The expenses are—
(a)any expenses—
(i)paid by the employee out of the earnings, or
(ii)paid on the employee’s behalf by another person and included in the earnings, and
(b)any other expenses paid in the United Kingdom in the tax year or an earlier tax year in which the employee has been resident in the United Kingdom.
(3)The condition is that the expenses would have been deductible under sections 336 to 342 if the earnings had been earnings charged on receipt in the tax year in which the expenses were incurred.
(4)Where—
(a)any of the deductibility provisions refers to amounts or expenses that would be deductible from earnings if they were paid by a person, and
(b)the earnings in question are earnings charged on remittance,
it is assumed for the purposes of those provisions that the person pays the amounts or expenses out of those earnings.
(1)If the earnings from an employment for a tax year include both earnings charged on receipt and other earnings (except earnings charged under section 22), no deduction is allowed under sections 336 to 342 from the earnings charged on receipt for an amount paid in respect of duties of the employment to which the other earnings relate.
(2)If the earnings from an employment for a tax year include both earnings charged on remittance under section 26 and other earnings, no deduction is allowed under section 353 from the earnings charged on remittance for an amount paid in respect of duties of the employment to which the other earnings relate.
(3)This section is to be disregarded for the purposes of the deductibility provisions.
(1)An employee may make a claim to [F30the Commissioners for Her Majesty’s Revenue and Customs] under this section if conditions A to D are met.
(2)Condition A is that the employee is not domiciled in the United Kingdom.
(3)Condition B is that the employment is with a foreign employer.
(4)Condition C is that the employee has made a payment out of earnings from the employment.
(5)Condition D is that the payment does not reduce the employee’s liability to United Kingdom income tax, but was made in circumstances corresponding to those in which it would do so.
(6)If the [F31Commissioners] are satisfied that conditions A to D are met, they may allow the payment as a deduction under this Chapter.
Textual Amendments
F30Words in Act substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 102(2); S.I. 2005/1126, art. 2(2)(h)
F31Word in s. 355 substituted (18.4.2005) by Commissioners for Revenue and Customs Act 2005 (c. 11), s. 53(1), Sch. 4 para. 102(3)(f); S.I. 2005/1126, art. 2(2)(h)
Modifications etc. (not altering text)
C3S. 355 restricted (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 33 para. 1(5) (with Sch. 36)
(1)No deduction from earnings is allowed under this Part for expenses incurred in providing entertainment or a gift in connection with the employer’s trade, business, profession or vocation.
(2)Subsection (1) is subject to the exceptions in—
(a)section 357 (exception where employer’s expenses disallowed), and
(b)section 358 (other exceptions).
(3)For the purposes of this section and those sections—
(a)“entertainment” includes hospitality of any kind, and
(b)expenses incurred in providing entertainment or a gift include expenses incurred in providing anything incidental to the provision of entertainment or a gift.
(1)The prohibition in section 356 on deducting expenses does not apply if—
(a)the earnings include an amount in respect of the expenses,
(b)the employer—
(i)paid the amount to, or on behalf of, the employee, or
(ii)put it at the employee’s disposal,
exclusively for meeting expenses incurred or to be incurred by the employee in providing the entertainment or gift, and
(c)condition A, B or C is met.
(2)Condition A is that the deduction of the amount falls to be disallowed under [F32section 45 or 867 of ITTOIA 2005 or under] [F33section 1298 of CTA 2009] in calculating the employer’s profits from the trade, profession or vocation in question for the purposes of the Tax Acts (or it would do so apart from the exemption in F34... [F35section 524 of ITA 2007] [F36or section 478 of CTA 2010] or any relief applying in respect of those profits).
[F37(3)Condition B is that the inclusion of the amount falls to be disallowed (or would be disallowed apart from some other relief applying to the employer) under [F38section 1298 of CTA 2009] in calculating—
(a)the employer’s expenses of management for the purposes of giving relief under the Tax Acts, or
[F39(b)the ordinary BLAGAB management expenses of the employer for the purposes of section 76 of FA 2012.]]
(4)Condition C is that—
(a)the employer is a tonnage tax company during the whole or part of the tax year, and
(b)apart from the tonnage tax election, the deduction of the amount included in the employee’s earnings would fall to be disallowed in calculating the employer’s relevant shipping profits.
(5)In subsection (4) “tonnage tax company”, “tonnage tax election” and “relevant shipping profits” have the same meaning as in Schedule 22 to FA 2000.
Textual Amendments
F32Words in s. 357(2) inserted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 593 (with Sch. 2)
F33Words in s. 357(2) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 552(2) (with Sch. 2 Pts. 1, 2)
F34Words in s. 357(2) repealed (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 385(a), Sch. 3 Pt. 1 (with Sch. 2)
F35Words in s. 357(2) inserted (6.4.2007) by Income Tax Act 2007 (c. 3), s. 1034(1), Sch. 1 para. 436 (with Sch. 2)
F36Words in s. 357(2) inserted (with effect in accordance with s. 1184(1) of the amending Act) by Corporation Tax Act 2010 (c. 4), s. 1184(1), Sch. 1 para. 385(b) (with Sch. 2)
F37S. 357(3) substituted (with effect in accordance with art. 1(2) of the amending S.I.) by The Finance Act 2004, Sections 38 to 40 and 45 and Schedule 6 (Consequential Amendment of Enactments) Order 2004 (S.I. 2004/2310), art. 1(2), Sch. para. 68(2)
F38Words in s. 357(3) substituted (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), s. 1329(1), Sch. 1 para. 552(3) (with Sch. 2 Pts. 1, 2)
F39S. 357(3)(b) substituted (17.7.2012) by Finance Act 2012 (c. 14), Sch. 16 para. 111
(1)The prohibition in section 356 on deducting expenses does not apply if the expenses are incurred in providing entertainment or gifts for the employer’s employees unless—
(a)they are also provided for others, and
(b)their provision for the employees is incidental to their provision for the others.
(2)For this purpose directors and persons engaged in the management of a company are regarded as employed by it.
(3)The prohibition in section 356 on deducting expenses does not apply if the expenses are incurred in providing a gift which incorporates a conspicuous advertisement for the employer or, if the employer is a company, another company which belongs to the same group as the employer, unless—
(a)the gift is food, drink, tobacco or a token or voucher exchangeable for goods, or
(b)the cost of the gift to the donor, together with any other gifts (except food, drink, tobacco or tokens or vouchers exchangeable for goods) given to the same person in the same tax year, is more than £50.
(4)In subsection (3) “group” means a body corporate and its 51% subsidiaries.
(1)No deduction may be made under the travel deductions provisions in respect of travel expenses incurred in connection with the use by the employee of a vehicle that is not a company vehicle if condition A or B is met.
(2)Condition A is that mileage allowance payments are made to the employee in respect of the use of the vehicle.
(3)Condition B is that mileage allowance relief is available in respect of the use of the vehicle by the employee (see section 231).
(4)In this section—
“company vehicle” has the meaning given by section 236(2),
“mileage allowance payments” has the meaning given by section 229(2), and
“the travel deductions provisions” means sections 337 to 342, 370, 371, 373 and 374 (travel expenses) and section 351 (expenses of ministers of religion).
(1)No deduction from earnings is allowed under this Chapter or section 373 (non-domiciled employee’s travel costs and expenses where duties performed in UK) for accommodation expenses incurred by a member of—
(a)the House of Commons,
(b)the Scottish Parliament,
(c)the National Assembly for Wales, or
(d)the Northern Ireland Assembly.
(2)In this section “accommodation expenses” means expenses incurred in, or in connection with, the provision or use of residential or overnight accommodation to enable the member to perform duties as a member of the Parliament or Assembly in or about—
(a)the place where it sits, or
(b)the constituency or region which the member represents.
[F40(3)In relation to a member of the House of Commons, subsection (3) of section 292 applies for the purposes of this section as it applies for the purposes of that section.]
Textual Amendments
F40S. 360(3) inserted (with effect in accordance with Sch. 4 para. 1(6) of the amending Act) by Finance (No. 2) Act 2010 (c. 31), Sch. 4 para. 1(3)
(1)No deduction from earnings is allowed under this Chapter for any contribution paid by any person under Part 1 of SSCBA 1992 or Part 1 of SSCB(NI)A 1992.
(2)But this prohibition does not apply to an employer's contribution (see subsection (3)) which is allowable as a deduction—
(a)under section 336 (the general rule),
(b)under any of sections 337 to 342 (travel expenses), or
(c)under section 351(1) (expenses of ministers of religion).
(3)For this purpose “an employer's contribution” means—
(a)a secondary Class 1 contribution,
(b)a Class 1A contribution, or
(c)a Class 1B contribution,
within the meaning of Part 1 of SSCBA 1992 or Part 1 of SSCB(NI)A 1992.]
Textual Amendments
F41S. 360A inserted (6.4.2005) by Income Tax (Trading and Other Income) Act 2005 (c. 5), s. 883(1), Sch. 1 para. 594 (with Sch. 2)
A deduction from a person’s earnings is allowed under the following provisions of this Chapter where—
(a)the earnings include an amount treated as earnings under—
(i)Chapter 4 of Part 3 (taxable benefits: vouchers and credit-tokens),
(ii)Chapter 5 of Part 3 (taxable benefits: living accommodation), or
(iii)Chapter 10 of Part 3 (taxable benefits: residual liability to charge), and
(b)an amount in respect of the benefit in question would be deductible under Chapter 2 or 5 of this Part if the person had incurred and paid it.
(1)A deduction from earnings is allowed if—
(a)the earnings include an amount treated as earnings under section 87(1) (cash equivalent of benefit of non-cash voucher treated as earnings),
(b)the voucher is exchanged for goods or services (whether in the tax year or a later year), and
(c)had the employee incurred and paid the cost of the goods or services in the tax year, the whole or part of the amount paid would have been deductible from the earnings under Chapter 2 or 5 of this Part.
(2)The deduction is equal to the lesser of—
(a)the amount treated as earnings, and
(b)the amount that would have been so deductible.
(1)A deduction from earnings is allowed if—
(a)the earnings include an amount treated as earnings under section 94(1) (cash equivalent of benefit of credit-token treated as earnings), and
(b)had the employee incurred and paid the cost of the goods or services obtained by using the token, the whole or part of the amount paid would have been deductible from the earnings under Chapter 2 or 5 of this Part.
(2)The deduction is equal to the lesser of—
(a)the amount treated as earnings, and
(b)the amount that would have been so deductible.
(1)A deduction from earnings is allowed if—
(a)the earnings include an amount treated as earnings under Chapter 5 of Part 3 (taxable benefits: living accommodation), and
(b)had the employee incurred and paid an amount equal to that amount for the accommodation in the tax year, the whole or part of the amount paid would have been deductible under Chapter 2 or 5 of this Part.
(2)The deduction is equal to the amount that would have been so deductible.
(1)A deduction from earnings is allowed if—
(a)the earnings include an amount treated as earnings under Chapter 10 of Part 3 (taxable benefits: residual liability to charge) in respect of a benefit, and
(b)had the employee incurred and paid the cost of the benefit, the whole or part of the amount paid would have been deductible under Chapter 2 or 5 of this Part.
(2)The deduction is equal to the amount that would have been so deductible.
(3)For the purposes of this section, the cost of the benefit is determined in accordance with sections 204 to 206.
A deduction from an employee’s earnings for an amount is allowed under this Chapter where the amount has been fixed by the Treasury by reference to the employee’s employment.
(1)A deduction is allowed for the sum, if any, fixed by the Treasury as in their opinion representing the average annual expenses incurred by employees of the class to which the employee belongs in respect of the repair and maintenance of work equipment.
(2)The Treasury may only fix such a sum for a class of employees if they are satisfied that—
(a)the employees are generally responsible for the whole or part of the expense of repairing and maintaining the work equipment, and
(b)the expenses for which they are generally responsible would be deductible from the employees' earnings under section 336 if paid by them.
(3)No deduction is allowed under this section if the employer pays or reimburses the expenses in respect of which the sum is fixed or would do so if requested.
(4)If the employer pays or reimburses part of those expenses or would do so if requested, the amount of the deduction is reduced by the amount which is or would be paid or reimbursed.
(5)In this section “work equipment” means tools or special clothing.
(6)This section needs to be read with section 330(2) (prevention of double deductions).
(1)A deduction is allowed from earnings payable out of the public revenue for the employee’s fixed sum expenses in respect of the duties to which the earnings relate.
(2)“Fixed sum expenses” means the sum, if any, fixed by the Treasury as in their opinion representing the average annual expenses which employees of the employee’s description are obliged to pay wholly, exclusively and necessarily in the performance of duties to which such earnings relate.
(3)This section needs to be read with section 330(2) (prevention of double deductions).
(1)A deduction from a person’s earnings for an amount is allowed under the following provisions of this Chapter where the amount is included in the earnings in respect of—
(a)provision made for the person, or
(b)expenses reimbursed by another person.
(2)In this Chapter references to “the included amount” are references to the amount so included.
(3)If the included amount is an amount treated as earnings under—
(a)Chapter 4 of Part 3 (taxable benefits: vouchers and credit-tokens),
(b)Chapter 5 of Part 3 (taxable benefits: living accommodation), or
(c)Chapter 10 of Part 3 (taxable benefits: residual liability to charge),
a deduction may be allowed instead in respect of the benefit in question under Chapter 3 of this Part (deductions from benefits code earnings).
(1)A deduction is allowed from earnings which are [F42relevant taxable earnings] if—
(a)the earnings include an amount in respect of—
(i)the provision of travel facilities for a journey made by the employee, or
(ii)the reimbursement of expenses incurred by the employee on such a journey, and
(b)the circumstances fall within Case A, B or C.
(2)The deduction is equal to the included amount.
(3)Case A is where—
(a)the employee is absent from the United Kingdom wholly and exclusively for the purpose of performing the duties of one or more employments,
(b)the duties concerned can only be performed outside the United Kingdom, and
(c)the journey is—
(i)a journey from a place outside the United Kingdom where such duties are performed to a place in the United Kingdom, or
(ii)a return journey following such a journey.
(4)Case B is where—
(a)the duties of the employment are performed partly outside the United Kingdom,
(b)those duties are not performed on a vessel,
(c)the journey is between a place in the United Kingdom and a place outside the United Kingdom where duties of the employment are performed,
(d)the duties performed outside the United Kingdom can only be performed there, and
(e)the journey is made wholly and exclusively for the purpose of performing them or returning after performing them.
(5)Case C is where—
(a)the duties of the employment are performed partly outside the United Kingdom,
(b)those duties are performed on a vessel,
(c)the journey is between a place in the United Kingdom and a place outside the United Kingdom where duties of the employment are performed,
(d)the duties performed outside the United Kingdom can only be performed there, and
(e)the journey is made wholly and exclusively for the purpose of performing those duties, or those duties and other duties of the employment, or returning after performing them.
[F43(6)In this section “relevant taxable earnings” means general earnings for a tax year in which the employee is ordinarily UK resident that—
(a)are taxable earnings under section 15, and
(b)would be taxable earnings under section 15 even if the employee made a claim under section 809B of ITA 2007 (claim for remittance basis) for that year.]
Textual Amendments
F42Words in s. 370(1) substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 27(2)
F43S. 370(6) inserted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 27(3)
(1)A deduction is allowed from earnings which are [F45relevant taxable earnings] if—
(a)the earnings include an amount in respect of—
(i)the provision of travel facilities for a journey made by the employee’s spouse [F46, civil partner] or child, or
(ii)the reimbursement of expenses incurred by the employee on such a journey, and
(b)conditions A to C are met.
(2)The deduction is equal to the included amount.
(3)Condition A is that the employee is absent from the United Kingdom for a continuous period of at least 60 days for the purpose of performing the duties of one or more employments.
(4)Condition B is that the journey is between a place in the United Kingdom and a place outside the United Kingdom where such duties are performed.
(5)Condition C is that the employee’s spouse [F47, civil partner] or child is—
(a)accompanying the employee at the beginning of the period of absence,
(b)visiting the employee during that period, or
(c)returning to a place in the United Kingdom after so accompanying or visiting the employee.
(6)A deduction is not allowed under this section for more than two outward and two return journeys by the same person in a tax year.
(7)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 outward journey.
[F48(8)In this section “relevant taxable earnings” has the meaning given by section 370(6).]
Textual Amendments
F44Words in s. 371 heading inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 146(3)
F45Words in s. 371(1) substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 28(2)
F46Words in s. 371(1)(a)(i) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 146(2)
F47Words in s. 371(5) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 146(2)
F48S. 371(8) inserted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 28(3)
For the purposes of—
(a)section 370 (employee’s travel costs and expenses where duties performed abroad), and
(b)section 371 (visiting spouse’s [F49, civil partner's] or child’s travel costs and expenses where duties performed abroad),
whether duties performed on a vessel are performed in or outside the United Kingdom is determined without regard to section 40(2) (certain duties treated as performed in UK).
Textual Amendments
F49Words in s. 372(b) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 147
(1)This section applies if a person (“the employee”) who is not domiciled in the 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 employee, 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 the journey meets conditions A and B.
(3)Condition A is that the journey 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 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 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.
(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.
(1)This section applies if a person (“the employee”) who is not domiciled in the 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 employee’s spouse [F51, civil partner] 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.
(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
(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 performed in the United Kingdom.
(5)Condition C is that the employee’s spouse [F52, civil partner] 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 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 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.
Textual Amendments
F50Words in s. 374 heading inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 148(3)
F51Words in s. 374(1)(b)(i) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 148(2)
F52Words in s. 374(5) inserted (5.12.2005) by The Tax and Civil Partnership Regulations 2005 (S.I. 2005/3229), regs. 1(1), 148(2)
(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 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 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.
(1)A deduction from earnings from an employment is allowed if—
(a)the duties of the employment are performed wholly outside the United Kingdom,
(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—
(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.
(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.
(4)Subsection (5) applies if in the tax year the employment is in substance one whose duties fall to be performed outside the United Kingdom.
(5)Duties of the employment performed in the United Kingdom, whose performance is merely incidental to the performance of duties outside the United Kingdom, are to be treated for the purposes of subsection (1)(a) as performed outside the United Kingdom.
(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,
(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,
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.
(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.
(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—
(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.
(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 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
“service” does not include a dwelling or grounds appurtenant to a dwelling.
(1)A deduction is allowed from earnings from an employment as a seafarer if—
(a)the earnings are [F53relevant taxable earnings [F54or EEA-resident earnings],]
(b)the duties of the employment are performed wholly or partly outside the United Kingdom, and
(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.
(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 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.
[F55(5)In this section “relevant taxable earnings” means general earnings for a tax year in which the employee is ordinarily UK resident that—
(a)are taxable earnings under section 15, and
(b)would be taxable earnings under section 15 even if the employee made a claim under section 809B of ITA 2007 (claim for remittance basis) for that year.]
[F56(6)In this section—
“EEA-resident earnings” means section 15 or 27 earnings for a period—
in which the employee is resident for tax purposes in an EEA state (other than the United Kingdom), and
which falls within a tax year in which the employee is not ordinarily UK resident,
“resident for tax purposes” means liable, under the law of the EEA state, to tax there by reason of domicile or residence,
“section 15 earnings” means general earnings to which section 15 applies, and
“section 27 earnings” means general earnings to which section 27 applies.]
Textual Amendments
F53Words in s. 378(1)(a) substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 29(2)
F54Words in s. 378(1)(a) inserted (with effect in accordance with s. 4(4) of the amending Act) by Finance (No. 3) Act 2010 (c. 33), s. 4(2)
F55S. 378(5) inserted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 29(3)
F56S. 378(6) inserted (with effect in accordance with s. 4(4) of the amending Act) by Finance (No. 3) Act 2010 (c. 33), s. 4(3)
(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.
(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 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).
(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 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 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 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)).
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,
[F57(c)section 262 of CAA 2001 (capital allowances to be given effect by treating them as deductions from earnings), and
(d)sections 188 to 194 of FA 2004 (contributions to registered pension schemes).]
Textual Amendments
F57S. 381(c)(d) substituted for s. 381(c)-(e) (6.4.2006) by Finance Act 2004 (c. 12), s. 284(1), Sch. 35 para. 61 (with Sch. 36)
(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
(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.
(2)Duties which a person performs on a vessel engaged on a voyage not extending to a port outside the United Kingdom are treated for the purposes of this Chapter as performed in the United Kingdom.
(3)For the purposes of subsection (1) the areas designated under section 1(7) of the Continental Shelf Act 1964 (c. 29) are treated as part of the United Kingdom.
(4)Subsection (1) applies despite anything to the contrary in section 40 (duties on board vessel or aircraft).
(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 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.
(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).
(1)In this Chapter employment “as a seafarer” means an employment (other than Crown employment) consisting of the performance of duties on a ship or of such duties and others incidental to them.
(2)In this section “Crown employment” means employment under the Crown—
(a)which is of a public nature, and
(b)the earnings from which are payable out of the public revenue of the United Kingdom or of Northern Ireland.
In this Chapter “ship” does not include an offshore installation.]
Textual Amendments
F58S. 385 substituted (with effect in accordance with Sch. 27 para. 16 of the amending Act) by Finance Act 2004 (c. 12), Sch. 27 para. 14
The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act you have selected contains over 200 provisions and might take some time to download.
Would you like to continue?
The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download.
Would you like to continue?
The Whole Act you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Whole Act without Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
The Schedules you have selected contains over 200 provisions and might take some time to download. You may also experience some issues with your browser, such as an alert box that a script is taking a long time to run.
Would you like to continue?
Latest Available (revised):The latest available updated version of the legislation incorporating changes made by subsequent legislation and applied by our editorial team. Changes we have not yet applied to the text, can be found in the ‘Changes to Legislation’ area.
Original (As Enacted or Made): The original version of the legislation as it stood when it was enacted or made. No changes have been applied to the text.
Point in Time: This becomes available after navigating to view revised legislation as it stood at a certain point in time via Advanced Features > Show Timeline of Changes or via a point in time advanced search.
Geographical Extent: Indicates the geographical area that this provision applies to. For further information see ‘Frequently Asked Questions’.
Show Timeline of Changes: See how this legislation has or could change over time. Turning this feature on will show extra navigation options to go to these specific points in time. Return to the latest available version by using the controls above in the What Version box.
Text created by the government department responsible for the subject matter of the Act to explain what the Act sets out to achieve and to make the Act accessible to readers who are not legally qualified. Explanatory Notes were introduced in 1999 and accompany all Public Acts except Appropriation, Consolidated Fund, Finance and Consolidation Acts.
Access essential accompanying documents and information for this legislation item from this tab. Dependent on the legislation item being viewed this may include:
This timeline shows the different points in time where a change occurred. The dates will coincide with the earliest date on which the change (e.g an insertion, a repeal or a substitution) that was applied came into force. The first date in the timeline will usually be the earliest date when the provision came into force. In some cases the first date is 01/02/1991 (or for Northern Ireland legislation 01/01/2006). This date is our basedate. No versions before this date are available. For further information see the Editorial Practice Guide and Glossary under Help.
Use this menu to access essential accompanying documents and information for this legislation item. Dependent on the legislation item being viewed this may include:
Click 'View More' or select 'More Resources' tab for additional information including: