Income Tax (Earnings and Pensions) Act 2003 section 27

UK-based earnings for year when employee not resident in UK

Section 27 sets out which earnings are taxable when an employee is not resident in the UK during the tax year in question.

• Non-UK resident employees are taxed on the full amount of general earnings for duties performed in the UK, and on general earnings from overseas Crown employment subject to UK tax, received in the tax year
• Where earnings relate to a post-employment notice period (payments in lieu of notice), only a proportion is taxable — calculated by reference to how much of those earnings would have been UK-taxable had the employment continued to the end of the notice period
• Earnings are taxable on a receipts basis, meaning it does not matter whether the employment is still held when the earnings are received, or whether the earnings relate to a different tax year
• The timing of when earnings are treated as received is governed by sections 18 and 19 of the Act, and the meaning of overseas Crown employment subject to UK tax is defined in section 28