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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Foreign travel rules: deductions limited to amount included in earnings

Sections 370 to 371 and 376 ITEPA 2003Some of the foreign travel deductions only apply where the employee’s taxable 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.This approach provides a built-in test. In the usual case, it will limit the deductions to the amounts that an employer is prepared to pay.

The deductions are available against general earnings taxable under Section 15 (or Section 21 before 6 April 2008) ITEPA 2003 (see EIM40101). It follows that if what the employer pays is not taxable under Section 15 ITEPA 2003, then no deduction can be given.

Round sum allowancesA general increase in pay or a round sum allowance does not represent ”an amount in respect of the provision of travel facilities for a journey … or the reimbursement of expenses incurred … on such a journey”. However, a common sense approach should be taken. Do not refuse to accept a deduction simply because the employer meets expenditure by reasonable and properly controlled scale payments.