EIM40206 - Employee resident or domiciled outside the United Kingdom: UK-based earnings: location of duties performed on a vessel or aircraft

Section 40 ITEPA 2003

It is a question of fact whether employment duties carried out on land are inside or outside of the UK. However, establishing the location of duties performed on a vessel or aircraft may be more problematic. In order to deal with this difficulty, statutory rules deem certain duties to be carried out inside the UK no matter where in geographical terms the duties are performed. The rules in section 40 apply for the purposes of Part 2 Chapter 5. Their main practical application is in determining the UK-based earnings of employees who are resident (section 15) or not resident (section 27) in the UK. See EIM40201 for more information about UK-based earnings. Different rules apply depending upon the residence status (see EIM42802) of the employee.

Any employee irrespective of residence

Duties performed by any person on a vessel on a voyage that does not extend to a port outside the UK are to be treated as performed in the UK. (See example EIM40207).

Employees resident in the United Kingdom

Treat duties performed by a resident of the UK on a vessel or aircraft engaged on certain voyages and flights as performed in the UK. Those voyages and flights are:

  • voyages and flights that either begin or end in the UK, or
  • any part of a voyage or flight that either begins or ends in the UK.

See example EIM40207.

Different rules for the Seafarers’ Earnings Deduction in Part 5 Chapter 6

Note that different rules apply for the purposes of the seafarers’ deduction (see EIM33033).

Different rules for calculating limit on chargeable overseas earnings where duties of associated employment performed in the UK

Section 40(3) applies a different rule to resident seafarers who are not domiciled in the UK and who perform their employment duties on ships. This rule only operates for the purpose of determining the limit on chargeable overseas earnings imposed by section 24 where the duties of an associated employment are performed in the UK.

For this purpose only: treat as performed outside the UK, any duties performed on a ship engaged on:

  • a voyage beginning or ending outside the UK or
  • on a part of a voyage that begins or ends outside the UK.

For further information see:

EIM40106 Calculation of chargeable overseas earnings
EIM40107 The Section 24 limit
EIM33101 Meaning of ‘seafarer’ and ‘ship’.