EIM40201 - Taxable earnings: employee resident or domiciled outside the United Kingdom: UK based earnings

Where an employee is either not resident (see EIM42802), or not domiciled (see EIM42804), in the UK for a tax year, it can be necessary to consider where employment duties were performed to determine the amount of general earnings for that year which are taxable when received.

Section 15 ITEPA 2003 determines general earnings chargeable to income tax in respect of duties performed in the UK for any tax year in which the employee or office holder is resident in the UK.

Section 27 ITEPA 2003 determines general earnings chargeable to income tax in respect of duties performed in the UK for any tax year in which the employee or office holder is not resident in the UK.

The full amount of section 15 or section 27 earnings received in a tax year comprises taxable earnings whether the earnings are for that year or some other year and whether or not the employment is still held at the time when the earnings are received. See EIM40222 for guidance on the calculation of general earnings in respect of duties performed in the UK. The place where duties are performed is significant in deciding whether earnings are chargeable under these sections. For most employees this is simply a question of fact. However, there are special rules which can apply in certain circumstances to deem employment duties to have been performed either in, or outside, the UK:

• Absence from employment (see EIM40202)
• The employment is in substance performed overseas, and any UK duties are merely incidental to the performance of the overseas duties (see EIM40203 and EIM40204)
• Duties performed on a vessel or aircraft (see EIM40206 and EIM40207)
• Workers in the oil and gas industry (see EIM40208)

General earnings from overseas Crown employment subject to United Kingdom tax (see EIM40205) are chargeable under either section 15 or section 27 depending on the circumstances.