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

Part 2 Chapter 5 ITEPA 2003

For the purposes of Chapter 5 of Part 2, where an employee 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 Chapters 4 and 5 of Part 2.

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, their employment duties would have been performed outside the UK then this rule is not applied and the general earnings for those duties would be treated as being performed outside the UK.

When considering general earnings for a period of absence under section 38, the general earnings are not to include earnings to which section 221A ITEPA 2003 applies (cancelled, moved or curtailed shift). The location of duties performed in these instances must be considered with respect to section 38A ITEPA 2003 (earnings related to duties not performed). More information on section 38A ITEPA can be found at EIM40210.

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.