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Income Tax (Earnings and Pensions) Act 2003

Travel costs and expenses where duties performed abroad

1617.The next three sections provide for deductions to be allowed from earnings for travel costs and expenses where the employee is resident and ordinarily resident in the United Kingdom but the duties of the employment are performed abroad. These sections derive from provisions in section 194 of ICTA.

Section 370: Travel costs and expenses where duties performed abroad: employee’s travel

1618.This section provides that a deduction is allowed from earnings for travel costs and expenses where the journey in question is made by the employee.

1619.The section derives from provisions in section 194(1), (3), (4), (5), (6) and (8) of ICTA.

1620.Subsection (1) specifies the circumstances in which a deduction from earnings is allowed. See also Change 101(A) in Annex 1. The deduction is allowed if:

  • the employee has earnings which are taxable earnings under section 15 or 21 (which apply if the employee is resident and ordinarily resident in the United Kingdom in the tax year);

  • the earnings include an amount in respect of the provision of travel facilities for a journey made by the employee, or the reimbursement of expenses incurred by the employee on such a journey; and

  • the requirements specified in one of cases A to C are met.

1621.Subsection (2) provides that the deduction is equal to the included amount; and cases A, B and C are set out in subsections (3), (4) and (5).

1622.In the source legislation the provisions of section 132(2) of ICTA could affect the availability of this deduction. The application of section 132(2) would mean the disallowance of a deduction under this section where the duties performed in the United Kingdom were merely incidental to the performance of the other duties of the employment outside the United Kingdom. In practice deductions are allowed in these circumstances; and, accordingly, material deriving from section 132(2) of ICTA has not been included in this section. See Change 101(B) in Annex 1.

Section 371: Travel costs and expenses where duties performed abroad: visiting spouse’s or child’s travel

1623.This section provides that a deduction is allowed from earnings for travel costs and expenses where the journey in question is made by the employee’s spouse or child.

1624.The section derives from provisions in section 194(1) and (2) of ICTA.

1625.Subsection (1) specifies the circumstances in which a deduction from earnings is allowed. See also Change 101(A) in Annex 1. The deduction is allowed if:

  • the employee has earnings which are taxable earnings under section 15 or 21 (which apply if the employee is resident and ordinarily resident in the United Kingdom in the tax year);

  • the earnings include an amount is respect of the provision of travel facilities for a journey made by the employee’s spouse or child, or the reimbursement of expenses incurred by the employee on such a journey; and

  • conditions A to C are met.

1626.Subsection (2) provides that the deduction is equal to the included amount; and conditions A, B and C are set out in subsections (3), (4) and (5).

Section 372: Where seafarers’ duties are performed

1627.This section provides that section 40(2) (certain duties treated as performed in the United Kingdom) does not apply for the purposes of determining whether duties performed on a vessel are performed in or outside the United Kingdom for the purposes of sections 370 and 371. It derives from section 194(7) of ICTA.

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