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HMRC internal manual

Employment Income Manual

Foreign travel rules: meaning of travelling expenses

Sections 341 to 342 and 370 to 371 ITEPA 2003

The legislation relating to the rules described at EIM34020 to EIM34080 uses terms such as:

  • provision of travel facilities for a journey
  • reimbursement of expenses incurred on a journey

These are not defined but where they refer to travel or a journey they should be read as covering both:

  • fares
  • subsistence expenditure while travelling

Example 1

If an employee travels from London to Milan to take up a new employment in Italy, section 341 allows “…expenses incurred by the employee in travelling…”. If the individual travels by train, eats meals on the train and stays overnight in a hotel to break the journey, all of the following costs are allowable:

  • rail fare
  • meals
  • hotel accommodation while on a journey

Example 2

The employee in example 1 is out of the United Kingdom for more than 60 days so the family travels to Milan to visit. They incur the same costs as those listed above, which are met by the employer. In addition, the employer pays for the family to stay in a hotel in Milan. The costs are all ultimately met by the employer and are taxable earnings of the employment. The following costs are allowed by section 371:

  • rail fare
  • meals
  • hotel accommodation while on a journey

However, the provision for the family of the hotel accommodation in Milan is not allowable.