SE35003 - Travelling expenses: employees working but not domiciled in the United Kingdom - the Schedule E expenses rule - expenses that may be deducted - example

An employee who is domiciled in France is sent by his employer to work in the United Kingdom for 6 months. He has not worked previously in the United Kingdom. The employer pays the travel expenses of the employee and his wife and pays for their board and lodging while they are in the United Kingdom.

Some of the expenses met by the employer are deductible under Section 198(1) ICTA 1988, some are deductible under Section 195 ICTA 1988 and some are not deductible at all.

The cost of the employee’s travel to and from France is deductible under Section 198(1) because the United Kingdom is a temporary workplace, see SE32065. If it were not deductible under that section it would be deductible under Section 195, see SE35030.

The cost of the employee’s wife’s travel to and from France is not deductible under Section 198(1), see SE31980. It is deductible under Section 195, see SE35050.

The employee’s board and lodging is deductible under Section 198(1), see SE31815. If it were not deductible under that section it would not be deductible under Section 195, see SE35100.

The employee’s wife’s board and lodging is not deductible under Section 198(1), see SE31980 and nor is it deductible under Section 195, see SE35100.

This is summarised in the table below.