SE35002 - Travelling expenses: employees working but not domiciled in the United Kingdom - the Schedule E expenses rule - expenses that may be deducted

In many cases a deduction is due under Section 198(1) ICTA 1988 for expenses that are not deductible under the special rules in Section 195 ICTA 1988.

For example, a deduction under Section 198(1) does not depend on the employee’s residence or domicile. The employee must not be domiciled in the United Kingdom if a deduction is to be given under Section 195.

A deduction under Section 198(1) may be due whether or not the expense has been reimbursed by the employer. A deduction is only due under Section 195 where the expense has been reimbursed by the employer, see SE35000.

On the other hand, the special rules in Section 195 may permit a deduction where the general rule in section 198(1) does not. For example, Section 198(1) does not permit a deduction for the cost of travelling to a workplace where the employee expects to be at that workplace for a period of continuous work lasting more than 24 months, see SE32080. A deduction may be due in these circumstances if the conditions of Section 195 are met.

The difference between the rule in Section 198(1) and the rules in Section 195 is illustrated by example SE35030.