SCHEDULES
SCHEDULE 45Statutory residence test
PART 2Key concepts
Work
26
1
P is considered to be “working” (or doing “work”) at any time when P is doing something—
a
in the performance of duties of an employment held by P, or
b
in the course of a trade carried on by P (alone or in partnership).
2
In deciding whether something is being done in the performance of duties of an employment, regard must be had to whether, if value were received by P for doing the thing, it would fall within the definition of employment income in section 7 of ITEPA 2003.
3
In deciding whether something is being done in the course of a trade, regard must be had to whether, if expenses were incurred by P in doing the thing, the expenses could be deducted in calculating the profits of the trade for income tax purposes.
4
Time spent travelling counts as time spent working—
a
if the cost of the journey could, if it were incurred by P, be deducted in calculating P's earnings from that employment under section 337, 338, 340 or 342 of ITEPA 2003 or, as the case may be, in calculating the profits of the trade under ITTOIA 2005, or
b
to the extent that P does something else during the journey that would itself count as work in accordance with this paragraph.
5
Time spent undertaking training counts as time spent working if—
a
in the case of an employment held by P, the training is provided or paid for by the employer and is undertaken to help P in performing duties of the employment, and
b
in the case of a trade carried on by P, the cost of the training could be deducted in calculating the profits of the trade for income tax purposes.
6
Sub-paragraphs (4) and (5) have effect without prejudice to the generality of sub-paragraphs (2) and (3).
7
Assume for the purposes of sub-paragraphs (2) to (5) that P is someone who is chargeable to income tax under ITEPA 2003 or ITTOIA 2005.
8
A voluntary post for which P has no contract of service does not count as an employment for the purposes of this Schedule.