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Income Tax (Earnings and Pensions) Bill


Income Tax (Earnings and Pensions) Bill
Part 5 — Employment income: deductions allowed from earnings
Chapter 2 — Deductions for employee’s expenses

    169

 

Travel expenses

 337   Travel in performance of duties

     (1)    A deduction from earnings is allowed for travel expenses if—

           (a)           the employee is obliged to incur and pay them as holder of the

employment, and

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           (b)           the expenses are necessarily incurred on travelling in the performance

of the duties of the employment.

     (2)    This section needs to be read with section 359 (disallowance of travel expenses:

mileage allowances and reliefs).

 338   Travel for necessary attendance

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     (1)    A deduction from earnings is allowed for travel expenses if—

           (a)           the employee is obliged to incur and pay them as holder of the

employment, and

           (b)           the expenses are attributable to the employee’s necessary attendance at

any place in the performance of the duties of the employment.

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     (2)    Subsection (1) does not apply to the expenses of ordinary commuting or travel

between any two places that is for practical purposes substantially ordinary

commuting.

     (3)    In this section “ordinary commuting” means travel between—

           (a)           the employee’s home and a permanent workplace, or

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           (b)           a place that is not a workplace and a permanent workplace.

     (4)    Subsection (1) does not apply to the expenses of private travel or travel

between any two places that is for practical purposes substantially private

travel.

     (5)    In subsection (4) “private travel” means travel between—

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           (a)           the employee’s home and a place that is not a workplace, or

           (b)           two places neither of which is a workplace.

     (6)    This section needs to be read with section 359 (disallowance of travel expenses:

mileage allowances and reliefs).

 339   Meaning of “workplace” and “permanent workplace”

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     (1)    In this Part “workplace”, in relation to an employment, means a place at which

the employee’s attendance is necessary in the performance of the duties of the

employment.

     (2)    In this Part “permanent workplace”, in relation to an employment, means a

place which—

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           (a)           the employee regularly attends in the performance of the duties of the

employment, and

           (b)           is not a temporary workplace.

            This is subject to subsections (4) and (8).

 

 

Income Tax (Earnings and Pensions) Bill
Part 5 — Employment income: deductions allowed from earnings
Chapter 2 — Deductions for employee’s expenses

    170

 

     (3)    In subsection (2) “temporary workplace”, in relation to an employment, means

a place which the employee attends in the performance of the duties of the

employment—

           (a)           for the purpose of performing a task of limited duration, or

           (b)           for some other temporary purpose.

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            This is subject to subsections (4) and (5).

     (4)    A place which the employee regularly attends in the performance of the duties

of the employment is treated as a permanent workplace and not a temporary

workplace if—

           (a)           it forms the base from which those duties are performed, or

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           (b)           the tasks to be carried out in the performance of those duties are

allocated there.

     (5)    A place is not regarded as a temporary workplace if the employee’s attendance

is—

           (a)           in the course of a period of continuous work at that place—

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                  (i)                 lasting more than 24 months, or

                  (ii)                comprising all or almost all of the period for which the

employee is likely to hold the employment, or

           (b)           at a time when it is reasonable to assume that it will be in the course of

such a period.

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     (6)    For the purposes of subsection (5), a period is a period of continuous work at a

place if over the period the duties of the employment are performed to a

significant extent at the place.

     (7)    An actual or contemplated modification of the place at which duties are

performed is to be disregarded for the purposes of subsections (5) and (6) if it

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does not, or would not, have any substantial effect on the employee’s journey,

or expenses of travelling, to and from the place where they are performed.

     (8)    An employee is treated as having a permanent workplace consisting of an area

if—

           (a)           the duties of the employment are defined by reference to an area

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(whether or not they also require attendance at places outside it),

           (b)           in the performance of those duties the employee attends different

places within the area,

           (c)           none of the places the employee attends in the performance of those

duties is a permanent workplace, and

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           (d)           the area would be a permanent workplace if subsections (2), (3), (5), (6)

and (7) referred to the area where they refer to a place.

 340   Travel between group employments

     (1)    A deduction from earnings from an employment is allowed for travel expenses

if conditions A to D are met.

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     (2)    Condition A is that the employee is obliged to incur and pay the expenses.

     (3)    Condition B is that the travel is for the purpose of performing duties of the

employment at the destination.

     (4)    Condition C is that the employee has performed duties of another employment

at the place of departure.

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Income Tax (Earnings and Pensions) Bill
Part 5 — Employment income: deductions allowed from earnings
Chapter 2 — Deductions for employee’s expenses

    171

 

     (5)    Condition D is that the employments are with companies in the same group.

     (6)    In this section “group” means a company and its 51% subsidiaries.

     (7)    For the purposes of sections 353 and 354 (special rules for earnings with a

foreign element), the expenses are treated as incurred in the performance of the

duties to be performed at the destination.

5

     (8)    This section needs to be read with section 359 (disallowance of travel expenses:

mileage allowances and reliefs).

 341   Travel at start or finish of overseas employment

     (1)    A deduction from earnings from an employment is allowed for starting travel

expenses and finishing travel expenses if conditions A to C are met.

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     (2)    Condition A is that the duties of the employment are performed wholly

outside the United Kingdom.

     (3)    Condition B is that the employee is resident and ordinarily resident in the

United Kingdom.

     (4)    Condition C is that in a case where the employer is a foreign employer, the

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employee is domiciled in the United Kingdom.

     (5)    If the travel is only partly attributable to the taking up or termination of the

employment, this section applies only to the part of the expenses properly so

attributable.

     (6)    Subsection (7) applies if in the tax year the employment is in substance one

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whose duties fall to be performed outside the United Kingdom.

     (7)    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 (2) as

performed outside the United Kingdom.

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     (8)    In this section—

                    “starting travel expenses” means expenses incurred by the employee in

travelling from a place in the United Kingdom to take up the

employment,

                    “finishing travel expenses” means expenses incurred by the employee in

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travelling to a place in the United Kingdom on the termination of the

employment, and

                    “employee” includes a person who is to be, or has ceased to be, an

employee.

     (9)    This section needs to be read with section 359 (disallowance of travel expenses:

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mileage allowances and reliefs).

 342   Travel between employments where duties performed abroad

     (1)    A deduction from earnings from an employment is allowed for travel expenses

incurred by the employee if conditions A to F are met.

     (2)    Condition A is that the travel is for the purpose of performing duties of the

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employment at the destination.

 

 

Income Tax (Earnings and Pensions) Bill
Part 5 — Employment income: deductions allowed from earnings
Chapter 2 — Deductions for employee’s expenses

    172

 

     (3)    Condition B is that the employee has performed duties of another employment

at the place of departure.

     (4)    Condition C is that the place of departure or the destination or both are outside

the United Kingdom.

     (5)    Condition D is that the duties of one or both of the employments are performed

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wholly or partly outside the United Kingdom.

     (6)    Condition E is that the employee is resident and ordinarily resident in the

United Kingdom.

     (7)    Condition F is that in a case where the employer is a foreign employer, the

employee is domiciled in the United Kingdom.

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     (8)    If the travel is only partly attributable to the purpose of performing duties of

the employment at the destination, this section applies only to the part of the

expenses properly so attributable.

     (9)    This section needs to be read with section 359 (disallowance of travel expenses:

mileage allowances and reliefs).

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Fees and subscriptions

 343   Deduction for professional membership fees

     (1)    A deduction from earnings from an employment is allowed for an amount

paid in respect of a professional fee if—

           (a)           the duties of the employment involve the practice of the profession to

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which the fee relates, and

           (b)           the registration, certification, licensing or other matter in respect of

which the fee is payable is a condition, or one of alternative conditions,

which must be met if that profession is to be practised in the

performance of those duties.

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     (2)    In this section “professional fee” means a fee mentioned in the following Table.

            

Table

 

Health professionals

 
 

1.  Fee payable for entry or retention of a name in any of the

 

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following—

 
 

     (a)    the Register of Chartered Psychologists,

 
 

     (b)    the register maintained by the Registrar of

 
 

Chiropractors,

 
 

     (c)    a roll or record kept for a class of dental auxiliaries,

 

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     (d)    the dentists register,

 
 

     (e)    the register of dispensing opticians,

 
 

     (f)    the register maintained by the Health Professions

 
 

Council,

 
 

 

Income Tax (Earnings and Pensions) Bill
Part 5 — Employment income: deductions allowed from earnings
Chapter 2 — Deductions for employee’s expenses

    173

 
 

     (g)    the register maintained by the registrar appointed by

 
 

the Hearing Aid Council,

 
 

     (h)    the register of medical practitioners,

 
 

     (i)    the register maintained by the Nursing and Midwifery

 
 

Council,

 

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     (j)    either of the registers of opthalmic opticians,

 
 

     (k)    the register maintained by the Registrar of Osteopaths,

 
 

     (l)    the Register of Pharmaceutical Chemists.

 
 

2.  Fee payable by a chartered psychologist on the issue of a

 
 

practising certificate.

 

10

 

Animal health professionals

 
 

3.  Fee payable for entry or retention of a name in any of the

 
 

following—

 
 

     (a)    the register maintained by the registrar appointed by

 
 

the Farriers Registration Council,

 

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     (b)    the supplementary veterinary register,

 
 

     (c)    the register of veterinary surgeons.

 
 

Legal professionals

 
 

4.  Fee payable to the Council for Licensed Conveyancers on

 
 

the issue of a licence to practise as a licensed conveyancer.

 

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5. Fee and contribution to the compensation fund or

 
 

Guarantee Fund payable on the issue of a solicitor’s practising

 
 

certificate.

 
 

Architects

 
 

6.  Fee payable for entry or retention of a name in the

 

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Register of Architects.

 
 

Teachers

 
 

7.  Fee payable for entry or retention of a name in any of the

 
 

following—

 
 

     (a)    the register maintained by the General Teaching

 

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Council for England,

 
 

     (b)    the register maintained by the General Teaching

 
 

Council for Scotland,

 
 

     (c)    the register maintained by the General Teaching

 
 

Council for Wales.

 

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Patent agents and trade mark agents

 
 

8.  Registration fee payable by—

 
 

     (a)    a registered patent agent,

 
 

     (b)    a registered trade mark agent.

 
 

9.  Practising fee payable by—

 

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     (a)    a registered patent agent,

 
 

     (b)    a registered trade mark agent.

 
 

 

Income Tax (Earnings and Pensions) Bill
Part 5 — Employment income: deductions allowed from earnings
Chapter 2 — Deductions for employee’s expenses

    174

 
 

Occupations in the transport sector

 
 

10.  Fee payable by a driving instructor for entry or retention

 
 

of a name in the register of approved instructors or on the

 
 

issue or renewal of a licence authorising its holder to give

 
 

paid instruction in the driving of a motor car.

 

5

 

11.  Fee (including any related medical or technical

 
 

examination fee) payable, on the issue or renewal of a licence

 
 

by the Civil Aviation Authority, by—

 
 

     (a)    an aircraft maintenance engineer,

 
 

     (b)    an air traffic controller or student air traffic controller,

 

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     (c)    a member of the flight crew of an aircraft registered in

 
 

the United Kingdom,

 
 

     (d)    a flight information service officer.

 
 

12.  Fee (including any related medical examination fee)

 
 

payable—

 

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     (a)    on the issue or renewal of a licence authorising its

 
 

holder to drive a large goods vehicle or a passenger-

 
 

carrying vehicle,

 
 

     (b)    by an officer or other seaman on the issue, renewal or

 
 

endorsement of a certificate, licence or other document

 

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which is required as evidence of his qualification or

 
 

competence to serve in a ship.

 
 

13.  Fee payable by a seafarer employed in a sea-going

 
 

United Kingdom ship on the issue or renewal of a medical

 
 

fitness certificate.

 

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     (3)    The Board of Inland Revenue may make an order adding such fee as is

specified in the order to the Table of fees mentioned in subsection (2).

     (4)    The Board may make an order if they consider that such fee is payable in

respect of any registration, certification, licensing or other matter if it is

required as a condition, or one of alternative conditions, of the practice of a

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profession.

 344   Deduction for annual subscriptions

     (1)    A deduction from earnings from an employment is allowed for an amount

paid in respect of an annual subscription if—

           (a)           it is paid to a body of persons approved under this section, and

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           (b)           the activities of the body which are directed to one or more of the

objects within subsection (2) are of direct benefit to, or concern the

profession practised in, the performance of the duties of the

employment.

     (2)    The objects are—

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           (a)           the advancement or dissemination of knowledge (whether generally or

among persons belonging to the same or similar professions or

occupying the same or similar positions),

           (b)           the maintenance or improvement of standards of conduct and

competence among the members of a profession,

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Income Tax (Earnings and Pensions) Bill
Part 5 — Employment income: deductions allowed from earnings
Chapter 2 — Deductions for employee’s expenses

    175

 

           (c)           the provision of indemnity or protection to members of a profession

against claims in respect of liabilities incurred by them in the exercise

of their profession.

     (3)    The Inland Revenue may approve a body of persons under this section if, on

an application by the body, they are satisfied that—

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           (a)           the body is not of a mainly local character,

           (b)           its activities are carried on otherwise than for profit,

           (c)           its activities are wholly or mainly directed to objects within subsection

(2).

     (4)    The Inland Revenue must give notice to the body of their decision on the

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application.

     (5)    If the activities of the body are to a significant extent directed to objects other

than objects within subsection (2), the Inland Revenue may—

           (a)           determine the proportion of the activities directed to objects within

subsection (2), and

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           (b)           determine that only such corresponding part of the subscription as is

specified by the Inland Revenue is allowable under this section.

     (6)    In determining that part, the Inland Revenue must have regard to the

proportion of expenditure of the body attributable to objects other than objects

within subsection (2) and all other relevant circumstances.

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     (7)    If a body applies for approval under this section and is approved, a

subscription paid to it—

           (a)           before it has applied but in the same tax year as the application, or

           (b)           after it has applied but before it is approved,

            is treated for the purposes of this section as having been paid to an approved

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body.

 345   Decisions of the Inland Revenue under section 344

     (1)    The Inland Revenue may by notice to the body in question—

           (a)           withdraw an approval given under section 344, and

           (b)           withdraw or vary a determination made under that section,

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            to take account of any change in circumstances.

     (2)    A body aggrieved by a decision of the Inland Revenue under section 344 or

subsection (1) may appeal to the Special Commissioners.

     (3)    The notice of appeal must be given to the Inland Revenue within 30 days after

the date on which notice of their decision was given to the body.

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Employee liabilities and indemnity insurance

 346   Deduction for employee liabilities

     (1)    A deduction from earnings from an employment is allowed for any or all of the

following—

            

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            A. Payment in or towards the discharge of a liability related to the

employment.

 

 

 
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Revised 17 February 2003