Part 2

Employment income: charge to tax
Chapter 5

Taxable earnings: remittance basis rules and rules for non-uk resident employees
Remittance basis rules for
employees outside section 26

Restrictions on remittance basis
24A
1
This section applies in relation to an employment (“
the relevant employment
”) for a tax year (“the relevant tax year”) if—
a
one or more of the paragraphs in subsection (5) applies,
b
conditions 1 to 4 are met, and
c
condition 5 is not met.
2
The consequences of this section applying are set out in sections 23(1A), 41C(4A), 41H(5) and 554Z9(1A).
3
But, for the purpose of determining if, and the extent to which, any provision of Part 11 (
PAYE
), or of
PAYE
regulations, applies in relation to any income, the application of any provision mentioned in subsection (2) in relation to the income is to be ignored.
4
In this section—
a
“
the relevant employee
” means the employee in respect of the relevant employment,
b
“
the relevant employer
” means the employer in respect of the relevant employment, and
c
“
UK
employment
” means an employment the duties of which are not performed wholly outside the United Kingdom and “
UK
employer” is to be read accordingly,
and the rules in section 24(5) (“associated” persons) apply for the purposes of this section.
5
The paragraphs referred to in subsection (1)(a) are—
a
general earnings from the relevant employment which are for the relevant tax year would, apart from section 23(1A) and step 3 in section 23(3), be “chargeable overseas earnings” under section 23(3);
b
employment income in respect of the relevant employment which is treated as accruing in the relevant tax year under section 41C(2) would, apart from sections 41C(4A), 41D and 41E, be “foreign” under section 41C(3);
c
employment income in respect of the relevant employment which is treated as accruing in the relevant tax year under section 41H(2) would, apart from sections 41H(5), 41I and 41L, be “chargeable foreign securities income” under section 41H(3);
d
section 554Z9(2) would, apart from section 554Z9(1A) and (4) and (5), apply to employment income in respect of the relevant employment which corresponds to the value of a relevant step, or a part of the value of a relevant step, which is “for” the relevant tax year as determined under section 554Z4.
6
Condition 1 is that the relevant employee holds a
UK
employment—
a
at a time in the relevant tax year when the relevant employee also holds the relevant employment, or
b
if the relevant tax year is a split year as respects the relevant employee, at a time in the
UK
part of the relevant tax year when the relevant employee also holds the relevant employment.
7
Condition 2 is that the
UK
employer is the same as, or is associated with, the relevant employer.
8
Condition 3 is that the
UK
employment and the relevant employment are related to each other.
9
Without prejudice to the generality of subsection (8), the
UK
employment and the relevant employment are to be assumed to be related to each other if one or more of the following paragraphs applies—
a
it is reasonable to suppose that—
i
the relevant employee would not hold one employment without holding the other employment, or
ii
the employments will cease at the same time or one employment will cease in consequence of the other employment ceasing;
b
the terms of one employment operate to any extent by reference to the other employment;
c
the performance of duties of one employment is (wholly or partly) dependent upon, or otherwise linked (directly or indirectly) to, the performance of duties of the other employment;
d
the duties of the employments are wholly or mainly of the same type (ignoring the fact that they may be performed (wholly or partly) in different locations);
e
the duties of the employments involve (wholly or partly) the provision of goods or services to the same customers or clients;
f
the relevant employee is—
i
a director (as defined in section 67) of the
UK
employer or the relevant employer who has a material interest (as defined in section 68) in the
UK
employer or the relevant employer,
ii
a senior employee of the
UK
employer or the relevant employer, or
iii
one of the employees of the
UK
employer or the relevant employer who receives the higher or highest levels of remuneration.
10
In subsection (9)(f) references to the
UK
employer or the relevant employer include references to—
a
any person with which the
UK
employer or the relevant employer (as the case may be) is associated, and
b
if the
UK
employer or the relevant employer (as the case may be) is a company, the following companies taken together as if they were one company—
i
the
UK
employer or the relevant employer (as the case may be), and
ii
all the companies with which the
UK
employer or the relevant employer (as the case may be) is associated.
11
The Treasury may by regulations amend this section so as to add to, reduce or modify the cases in which the
UK
employment and the relevant employment are to be assumed to be related to each other.
12
A statutory instrument containing regulations under subsection (11) may not be made unless a draft has been laid before, and approved by a resolution of, the House of Commons.
13
Condition 4 is that X% is less than Y%.
14
“X%” is given by the following formula—
C/I × 100 %
See section 24B for the definitions of “C” and “I”.
15
“Y%” is 65% of the additional rate for the relevant tax year.
16
The Treasury may by regulations amend this section so as to amend the definition of “Y%”.
17
Condition 5 is that—
a
were the duties of the relevant employment to be duties of the
UK
employment instead, all or substantially all of them could not lawfully be performed in the relevant territory (whether on the meeting of any condition or otherwise) by virtue of any regulatory requirements imposed by or under the law of that territory, and
b
were the
UK
duties of the
UK
employment to be duties of the relevant employment instead, all or substantially all of them could not lawfully be performed in the part of the United Kingdom in which they are performed (whether on the meeting of any condition or otherwise) by virtue of any regulatory requirements imposed by or under the law of that part of the United Kingdom.
18
In subsection (17)—
- “
the relevant territory
” means the territory in which the duties of the relevant employment are performed, and
- “
UK
duties
” means duties performed in the United Kingdom.
Words in cross-heading substituted (with effect in accordance with Sch. 46 para. 25 of the amending Act) by Finance Act 2013 (c. 29), Sch. 46 para. 7(2)(b) (with Sch. 46 para. 26)
S. 21 cross-heading substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 12
Pt. 2 applied (E.W.S.) (31.3.2017) by The Equality Act 2010 (Specific Duties and Public Authorities) Regulations 2017 (S.I. 2017/353), reg. 1(1), Sch. 1 para. 4(3) (with reg. 2(4)(5))
Ss. 24A, 24B inserted (17.7.2014) by Finance Act 2014 (c. 26), Sch. 3 para. 3
Pt. 2 Ch. 5 title substituted (with effect in accordance with Sch. 7 para. 81 of the amending Act) by Finance Act 2008 (c. 9), Sch. 7 para. 10
Pt. 2 applied (with effect in accordance with s. 1329(1) of the amending Act) by Corporation Tax Act 2009 (c. 4), ss. 969(4)(a), 1329(1) (with Sch. 2 Pts. 1, 2)