Section 373: Non-domiciled employee’s travel costs and expenses where duties performed in UK
1629.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.
1630.The section derives from provisions in section 195(1), (2), (5), (7), (8) and (9) of ICTA.
1631.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 is not domiciled in the United Kingdom;
the employee receives earnings from an employment for duties performed in the United Kingdom; and
an amount is included in the earnings 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.
1632.Subsection (2) provides for the deduction from earnings to be allowed if:
the earnings are earnings charged on receipt (a term defined in section 335(4)); and
1633.Condition A insubsection (3) reflects Inland Revenue practice in linking the five year period to the date when the journey was undertaken as opposed to the date when the expenditure was incurred. See Change 102 in Annex 1.
1634.Subsection (5) provides that if the journey is wholly for the purpose specified in subsection (4), the deduction allowed is equal to the included amount; and subsection (6) provides that if the journey is only partly for that purpose, the deduction allowed is only a proportion of the included amount.
1635.In section 195 of ICTA there are references to a person’s “usual place of abode” and this expression is then defined (in section 195(9)) as “the country (outside the United Kingdom) in which he normally lives”. The provisions in this Act take a simpler approach, referring just to “the country outside the United Kingdom in which the employee normally lives”.
