Income Tax (Earnings and Pensions) Act 2003 section 25

UK-based earnings for year when employee resident, but not ordinarily resident, in UK

Section 25 sets out how to calculate taxable earnings for a tax year in which an employee is resident in the UK but not ordinarily resident, where those earnings relate to duties performed in the UK or arise from overseas Crown employment subject to UK tax.

• This section applies to employees who are UK resident but not ordinarily resident in the UK during the relevant tax year.
• The earnings covered are those for duties actually performed in the UK, or earnings from overseas Crown employment that is subject to UK tax (as defined elsewhere in the Act).
• Taxable earnings are calculated on a receipts basis — that is, they are taxed in the year they are received rather than the year in which the work was done.
• The receipts basis applies regardless of whether the earnings relate to a different tax year from that in which they are received, or even to a year in which the employment was not held.