EIM40202 - Employee resident or domiciled outside the United Kingdom: location of duties: absence from employment

Part 2 Chapter 5 ITEPA 2003

Where an employee who is either not resident, or not domiciled, in the UK for a tax year normally performs the whole or part of their employment duties in the UK, section 38 provides rules to determine the place where the duties of that employment are treated as having been performed during any absence from the employment for the purposes of Part 2 Chapters 4 and 5 (sections 22, 26 and 27).

If an employee who ordinarily works in the UK is absent from work, the general earnings for the period of absence must be treated as being for duties performed in the UK, even if the employee is in fact abroad at that time. If, exceptionally, the employee can show that if they had been working, the earnings would have been for working abroad then this rule is not applied.

Example

An employee who is not resident in the UK performs employment duties in Manchester one day a week. Illness meant there was a period of absence, during which the employee would normally have worked in the UK for three days.

Although no duties were performed during the absence, section 38 treats any of the employee’s earnings for these three days as being earnings for duties performed in the UK. The earnings are therefore chargeable under section 27.