EIM40002 - General earnings from employment: "taxable earnings"

Part 2 Chapters 4 and 5 ITEPA 2003

Chapters 4 and 5 of Part 2 include the charging provisions for general earnings. General earnings from an office or employment that are not covered by any of these charging provisions are not taxable earnings and therefore fall outside of the scope of United Kingdom income tax.

The circumstances of the employee or office holder (see EIM40001) are used to determine the relevant charging provision. The charging provisions are summarised below together with the relevant guidance:

Chapter 4 ITEPA 2003: employee resident in the UK

Section 15

Until 5 April 2008, Section 15 related to general earnings for a tax year in which the employee or office holder was resident, ordinarily resident and domiciled in the UK (see EIM40101).

With effect from 6 April 2008, Section 15 applies to general earnings for a tax year in which the employee or office holder is resident in the United Kingdom (see EIM40101). It is not necessary for the employee or office holder to be ordinarily resident and/or domiciled in the UK as well.

Chapter 5 ITEPA 2003: remittance basis and employee not resident in the UK

Section 22

General earnings for a tax year in which the employee or office holder is resident and ordinarily resident but not domiciled in the United Kingdom, to the extent that they are chargeable overseas earnings (see EIM40102).

Section 26

Foreign earnings for a tax year when employee or office holder is resident but not ordinarily resident in the UK (see EIM40301).

Section 27

UK-based earnings for a tax year when employee or office holder is not resident in the UK (see EIM40201 and EIM40221).

Section 21 and 25 ITEPA 2003 – 2007/08 and earlier years

Until 5 April 2008, general earnings for a tax year in which the employee or office holder was resident and ordinarily resident but not domiciled in the UK, except chargeable overseas earnings (see EIM40101), were taxable under Section 21.

Until 5 April 2008, UK based earnings for a tax year when an employee or office holder was resident but not ordinarily resident in the UK (see EIM40201 and EIM40221) were taxable under Section 25.

Sections 21 and 25 were abolished by Finance Act 2008 with effect from 6 April 2008. From that date general earnings for a tax year in which an employee or office holder is resident in the UK (whether or not the employee or office holder is also ordinarily resident and/or domiciled in the UK as well) are taxable under Section 15.

The year that general earnings are "for"

See EIM40008 and subsequent for guidance on the year that earnings are “for"

Special rules in Section 17 (Chapter 4) and Section 30 (Chapter 5) provide for general earnings to fall within the appropriate charging provision even if the employment had not started when they were received or had ended before they were received (see EIM40005).

Taxable earnings

Once the appropriate charging provision has been identified, the amount of general earnings that are taxable earnings will be as follows:


SectionTaxable earnings
15Full amount of general earnings received in the tax year
22Full amount of chargeable overseas earnings remitted to the UK in the tax year
26Full amount of foreign earnings remitted to the UK in the tax year
27Full amount of UK-based earnings received in the tax year

For most employees the tax year that general earnings are "for" and the tax year in which they are received will be the same. However, when those years are different, general earnings within one of the charging provisions for the tax year they are earned will be taxable earnings in the tax year that they are received (Sections 15 and 27) or remitted to the United Kingdom (Sections 22 and 26).

Further guidance:


EIM40003A diagram summarises the scope of the charging provisions
Example EIM40004Examples of the charging provisions in practice.
EIM42200 onwardsGuidance regarding the year in which general earnings are taxable earnings if they fall into one of the charging provisions in the year that they are "for".