SE31620 - The Schedule E expenses rule: introduction

Section 198(1) ICTA 1988

Most deductions that can be made from emoluments are made under Section 198(1) ICTA 1988. This is commonly known as the 'Schedule E expenses rule'.

If a deduction is not allowable under Section 198(1) check the table in SE31611 to see if it is allowable under other legislation.

Section 198(1) applies only to emoluments within Cases I and II of schedule E. Deductions from emoluments within Case III of Schedule E are made under Section 198(2) and (3), see SE31750.

For 2002/03 onwards no deduction under Section 198 ICTA 1988 is permitted for costs incurred by employees who use their own vehicle or bicycle for business travel. Instead a deduction is permitted under the statutory mileage allowance relief scheme, see SE31626.