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

(The document as of February, 2008)

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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.

(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.

(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.

(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.

(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 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 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.

(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 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: 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 employment at the destination.

(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 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.

(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).

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 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.

(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 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,

(d)

the dentists register,

(e)

the register of dispensing opticians,

(f)

the register maintained by the Health Professions Council,

(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,

(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.

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,

(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.

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 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 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.

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--

(a)

a registered patent agent,

(b)

a registered trade mark agent.

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.

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,

(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--

(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 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.

(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 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

(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--

(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,

(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--

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

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

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

(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.

(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 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,

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.

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--

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

B. Payment of any costs or expenses incurred in connection with--

(a)

a claim that the employee is subject to a liability related to the employment, or

(b)

proceedings relating to or arising out of a claim that the employee is subject to a liability related to the employment.

C. Payment of a premium under a qualifying insurance contract, but only to the extent that the premium relates to--

(a)

provision in the contract for the employee to be indemnified against a payment falling within paragraph A, or

(b)

provision in the contract for the payment of any costs or expenses falling within paragraph B.

(2) But a deduction is not allowed for a payment which falls within paragraph A or B if it would be unlawful for the employer to enter into a contract of insurance in respect of the liability, or costs or expenses, in question.

(3) In this Chapter--

(a) "premium", in relation to a qualifying insurance contract, means an amount payable to the insurer under the contract, and

(b) where a qualifying insurance contract relates to more than one person, employment or risk, the part of the premium to be treated as relating to each of them is to be determined by apportionment on a just and reasonable basis.

347 Payments made after leaving the employment

(1) A deduction for a payment is not allowed under section 346 if--

(a) the employee has ceased to hold the employment, and

(b) the payment is made after the day on which the employee ceased to hold the employment.

(2) If subsection (1) applies, see section 555 (former employee entitled to deduction from total income).

348 Liabilities related to the employment

For the purposes of this Chapter each of the following kinds of liability is related to the employment--

A. Liability imposed upon the employee because he did an act, or failed to do an act--

(a)

in his capacity as holder of the employment, or

(b)

in any other capacity in which he acted in the performance of the duties of the employment.

B. Liability imposed upon the employee in connection with any proceedings relating to, or arising from, a claim that he is subject to a liability because he did an act, or failed to do an act--

(a)

in his capacity as holder of the employment, or

(b)

in any other capacity in which he acted in the performance of the duties of the employment.

349 Meaning of "qualifying insurance contract"

(1) In section 346 "qualifying insurance contract" means a contract of insurance which meets conditions A, B, C and D.

(2) Condition A is that, so far as the risks insured against are concerned, the contract only relates to one or more of the following--

(a) the indemnification of an employee against a liability related to the employment,

(b) the indemnification of a person against vicarious liability in respect of a liability related to another person's employment,

(i) in connection with a claim that a person is subject to a liability to which the insurance relates, or

(ii) in connection with any proceedings relating to or arising out of a claim that a person is subject to a liability to which the insurance relates,

(d) the indemnification of an employer against loss from a payment made by the employer to an employee in respect of--

(i) a liability related to the employment, or

(ii) any costs or expenses incurred as mentioned in paragraph (c).

(3) Condition B is that--

(a) the period of insurance under the contract does not exceed 2 years or, if it does, it does so only because of one or more renewals, each for a period of 2 years or less, and

(b) the insured is not required to renew the contract for any period.

(4) Condition C is--

(a) that the insured is not entitled under the contract to receive any payment or other benefit in addition to--

(i) cover for the risks insured against, and

(ii) any right to renew the contract, or

(b) if the insured is so entitled, that the part of the premium reasonably attributable to the entitlement is not a significant part of the whole premium.

(5) Condition D is that the contract is not connected with another contract.

350 Connected contracts

(1) An insurance contract is connected with another contract for the purposes of section 349 if conditions E and F are met--

(a) at the time when both contracts are first in force, or

(b) at any time after that time.

(2) Condition E is that one of the contracts was entered into--

(a) by reference to the other, or

(b) with a view to enabling or facilitating entry into the other on particular terms.

(3) Condition F is that the terms on which one of the contracts was entered into are significantly different from what they would have been if--

(a) it had not been entered into in anticipation of the other being entered into, or

(b) the other had not also been entered into.

(4) If--

(a) there is only one such significant difference in terms, and

(b) the contracts meet conditions A, B and C specified in section 349,

the difference may be disregarded in the following cases.

(5) The first case is where the difference is a reduction in premiums under the contract that is reasonably attributable only to the contract--

(a) containing a right to renew, or

(b) being entered into by way of renewal.

(6) The second case is where--

(a) two or more contracts have been entered into as part of a single transaction, and

(b) the difference is reductions in their premiums that are reasonably attributable only to the premium under each of them having been fixed by reference to the appropriate proportion of the combined premium.

(7) In subsection (6) "the combined premium" means the amount that would have been the total premium under a single contract relating to all the risks covered by the contracts.

Expenses of ministers of religion

351 Expenses of ministers of religion

(1) A deduction is allowed from any earnings from any employment as a minister of a religious denomination for amounts incurred by the minister wholly, exclusively and necessarily in the performance of duties of such an employment.

(2) If a minister of a religious denomination pays rent in respect of a dwelling-house, part of which is used mainly and substantially for the purposes of such duties, a deduction is allowed from the minister's earnings from any employment as such a minister for--

(a) one quarter of the rent, or

(b) if less, the part of the rent that, on a just and reasonable apportionment, is attributable to that part of the dwelling-house.

(3) If--

(a) an interest in premises belongs to a charity or an ecclesiastical corporation, and

(b) because of that interest and by reason of holding an employment as a minister of a religious denomination, the minister has a residence in the premises from which to perform the duties of the employment,

a deduction is allowed from the minister's earnings from any such employment for part of any expenses borne by the minister on the maintenance, repair, insurance or management of the premises.

(4) The amount of the deduction is--

---

where--

A is the amount of the expenses borne by the minister on the maintenance, repair, insurance or management of the premises, and
B is the amount of those expenses that are allowed under subsection (1).

(5) In this section "charity" means a body of persons or trust established for charitable purposes only.

(6) Subsection (1) needs to be read with section 359 (disallowance of travel expenses: mileage allowances and reliefs).

Agency fees paid by entertainers

352 Limited deduction for agency fees paid by entertainers

(1) A deduction is allowed from earnings from an employment as an entertainer for agency fees (and any value added tax on them) if the fees are calculated as a percentage of the whole or part of the earnings from the employment.

This is subject to the limit in subsection (2).

(2) Amounts may be deducted under this section in calculating the net taxable earnings from an employment in a tax year only to the extent that, in aggregate, they do not exceed 17.5% of the taxable earnings from the employment in the tax year.

(3) Subsections (4) and (5) apply for the purposes of this section.

(4) "Entertainer" means an actor, dancer, musician, singer or theatrical artist.

(5) "Agency fees", in relation to an employment, means--

(a) fees paid under a contract between the employee and another person, to whom the fees are paid, who--

(i) agrees under the contract to act as an agent of the employee in connection with the employment, and

(ii) at the time the fees are paid is carrying on an employment agency with a view to profit, and

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