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HMRC internal manual

Employment Income Manual

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Travelling expenses: employees working but not domiciled in the United Kingdom: travelling expenses of the employee's family

Section 374 ITEPA 2003

Summary

This page is concerned with the travelling expenses allowed in respect of an employee’s family travelling between the United Kingdom and the country outside the United Kingdom in which the employee normally lives.

Conditions

The conditions are as follows:

  • the employee who is not domiciled in the United Kingdom:
    • receives earnings from an employment for duties performed in the United Kingdom and
    • an amount is included in the earnings in respect of the provision of travel facilities for a journey made by the employee’s spouse, civil partner or child or the reimbursement of expenses incurred by the employee on such a journey
       
  • the earnings are charged on receipt (deductions under Sections 373 to 375 cannot be given against earnings charged on remittance under either Section 22 ITEPA 2003 (see EIM40102) or Section 26 ITEPA 2003 (see EIM40304))
  • the journey is made between the country outside the United Kingdom in which the employee normally lives and a place in the United Kingdom
  • the journey ends within five years of the employee’s qualifying arrival in the United Kingdom (see EIM35060)
  • the employee is present in the United Kingdom for a continuous period of at least 60 days for the purpose of performing the duties of one or more employments from which the employee receives earnings for duties performed in the United Kingdom
  • the employee’s spouse, civil partner or child is:
    • accompanying the employee at the beginning of that period
    • visiting the employee during that period, or
    • returning to the country in which the employee normally lives after so accompanying or visiting the employee.

Nature of the deduction

Where the journey is wholly for the purpose of accompanying or visiting the employee or returning afterwards, the deduction is equal to the amount of the provision or expense that is included in the employee’s earnings. Where the journey is only partly for that purpose, the deduction is limited to the amount that is properly attributable to that purpose.

A deduction cannot be allowed for more than: -

  • two inward journeys (from the place where the employee normally lives to the United Kingdom) and
  • two return journeys (from the United Kingdom to the place where the employee normally lives)

by the same person in any tax year.

Meaning of child

Child for this purpose includes any stepchild, adopted child or illegitimate child but not a person who is 18 or over at the beginning of the inward journey.

Additional information

The deduction only covers the travel costs of the spouse, civil partner and children. Once the family arrives in the United Kingdom no deduction can be given for their accommodation or subsistence. If the employer meets the cost of the family’s accommodation or subsistence the cost will be included in the employee’s taxable earnings.

The 60 days rule

The 60 days rule must be satisfied for each journey made by the employee’s family. For the purposes of Section 374 only, employees will satisfy the rule where:

  • they spend at least two thirds of their working days in the United Kingdom over a period of at least 60 days and
  • they are present in the United Kingdom for the purpose of performing the duties of their employment both at the start and at the end of this period.

EIM35055 gives examples of how the 60 days rule applies in the context of Section 374.