Income Tax (Earnings and Pensions) Act 2003 (c. 1)

Part 5 Employment income: deductions allowed from earnings

Chapter 5 Deductions for earnings representing benefits or reimbursed expenses

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 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.