SE40221 - Schedule E Case II: calculation of emoluments arising from duties performed in the United Kingdom
Section 19(1)1 ICTA 1988
Employees who are Not Resident or Not Ordinarily Resident in the
United Kingdom are chargeable to income tax under Case II of
Schedule E on emoluments arising from duties performed in the
United Kingdom. Where all of the duties are performed here
calculation is not difficult but where duties are performed partly
in the United Kingdom and partly overseas, time apportionment is
used. See
SE40304 and Statement of Practice 5/84
(SP5/84).
To calculate the amount of the emoluments chargeable under
Case II take the following steps:
- Calculate total emoluments (both cash and non-cash benefits) from the relevant employment for the year
- Establish the number of workdays that the employee worked in respect of the employment in the year. This is the denominator in the apportionment fraction.
- Establish the number of workdays that the employee spent working in the United Kingdom in the year. This is the multiplier in the apportionment fraction.
Where the same amount of salary is paid throughout the year, the
emoluments to be attributed to United Kingdom duties can be
calculated in this way. Accept computations on this basis unless it
seems likely that the rate of remuneration changed during the year
and the amount involved is worthwhile. If there is more than one
employment deal with each one separately.
See example
SE40222.
SA Return Employment Pages
The Employment Pages of the SA Return produce a computation of Case II liability using a different approach to that described above.
- Total emoluments are reported in the cash and benefits sections
- Box 1.31 is a deduction box in which non-Case II emoluments (and non- remitted Case III) are entered
- Helpsheet IR211 is available to assist tax-payers to calculate the amount to be entered in Box 1.31
