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HMRC internal manual

Employment Income Manual

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Foreign travel rules: duties performed partly overseas: seafarers

Section 370 ITEPA 2003 (Case C)

Summary

This page is concerned with the application of the foreign travel rules to employees who perform the duties of their employment on a vessel. Certain journeys may qualify for a deduction under Section 370 ITEPA 2003 provided the conditions in Section 370(1) have been met and the circumstances fall within Case C in Section 370(5).

Conditions

The employee must:
 

  • be resident in the United Kingdom (see EIM34010) and
  • the employee’s taxable earnings must 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.

Circumstances falling within Case C:
 

  • the duties of the employment are performed partly outside the United Kingdom
  • those duties are performed on a vessel
  • the journey is between a place in the United Kingdom and a place outside the United Kingdom where duties of the employment are performed
  • the duties performed outside the United Kingdom can only be performed there and
  • the journey is made wholly and exclusively for the purpose of performing those duties, or those duties and other duties of the employment, or returning after performing them.

Where seafarers’ duties are performed (Section 372 ITEPA 2003)

Section 372 provides special rules for deciding where duties of an employment on a vessel are performed for the purposes of the deductions allowed by Section 370 (employee’s travel where duties performed abroad) and Section 371 (visiting spouse’s, civil partner’s or child’s travel where duties performed abroad). Whether duties performed on a vessel are performed in or outside the United Kingdom should be determined without regard to the rules in Section 40(2) ITEPA 2003 that treat certain duties as performed in the United Kingdom (see EIM40206).

The condition in Section 370 (Case C) that the duties of employment are performed partly outside the United Kingdom can therefore be tested by reference to the actual place where the duties are performed. Where employment duties are performed on a vessel located outside of United Kingdom territorial waters, then the condition will be satisfied.

The same applies to the condition in Section 371 that the employee must be absent from the United Kingdom for a continuous period of at least 60 days for the purpose of performing the duties of one or more employments. Days that an employee spends performing duties on a vessel located outside of United Kingdom territorial waters may therefore be taken into account when determining whether there is a continuous period of at least 60 days.

Summary of deductions to be allowed

Where the employer provides travel facilities or reimburses expenses to enable a seafarer to perform duties outside the UK, the seafarer will be entitled to deductions in respect of:
 

  • travelling expenses between home and the vessel at the beginning or end of any voyage and
  • interim visits home.

The seafarer also qualifies for deductions in respect of the travelling expenses of the family where the additional conditions described at EIM34050are satisfied.