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HMRC internal manual

Employment Income Manual

Other expenses: earnings of non-domiciled employee from a foreign employer: corresponding payments

Section 355 ITEPA 2003


Employees of “foreign employers” (see EIM40031) who are not domiciled in the United Kingdom (see EIM42804) may incur expenditure which would have reduced their United Kingdom tax liability if it had been incurred under an obligation under United Kingdom law. A special rule provided by Section 355 covers this situation. It provides that the Commissioners of HMRC may allow a deduction for payments made by a non-domiciled employee out of the earnings of the employment with a foreign employer in circumstances corresponding to those which would have reduced his liability to United Kingdom income tax.

The main category of expenditure that would not otherwise qualify for a relief or deduction is contributions to overseas pension schemes, see EIM32671.

Other guidance

EIM40031 Meaning of “foreign employer’’.
EIM32665 Procedure for dealing with corresponding payment claims.


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