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HMRC internal manual

Employment Income Manual

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HM Revenue & Customs
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Travelling expenses: employees working abroad: expenses that may be deducted

Sections 337 and 338 ITEPA 2003

In many cases a deduction is due under Section 337 ITEPA 2003 (travel in performance of duties) or Section 338 ITEPA 2003 (travel for necessary attendance) for expenses that are not deductible under the special rules.

For example, a deduction under Section 337 or 338 does not depend on the employee’s residence status. The employee’s residence status is important for the special rules, see EIM34010.

A deduction under Section 337 or Section 338 may be due whether or not the expense has been reimbursed by the employer. In many cases a deduction is only due under the special rules where the earnings include an amount in respect of the provision of travel facilities for a journey made by the employee, or the reimbursement of expenses incurred by the employee on such a journey. For example, the special rules generally provide for a deduction where the employer meets or reimburses the cost of an employee’s journey, see EIM34025.

The main rules that provide a deduction for employees’ travelling expenses will usually apply in the following circumstances:
 

  • travelling appointments, see EIM32366
  • overseas conferences and study tours, see EIM31950
  • travel between group employments, see EIM32035.

The special rules may permit a deduction where the main rules do not. For example,Section 338 does not permit a deduction for the cost of travelling to a workplace where the employee expects to be at that workplace for a period of continuous work lasting more than 24 months. A deduction may be due in these circumstances if the conditions of the special rules are met.

The difference between the main rules and the special rules is illustrated by example EIM34003.