Income Tax (Earnings and Pensions) Act 2003 section 299

Crown employees' foreign service allowances

Section 299 provides a tax exemption for allowances paid to Crown employees to compensate them for the additional costs of living outside the United Kingdom in order to carry out their duties.

• Allowances paid to Crown employees for the extra cost of living abroad for work purposes are exempt from income tax
• The exemption only applies if the allowance is formally certified as representing compensation for those extra costs
• The certificate may be issued by the Treasury or by one of seven specified senior government officeholders
• Without a valid certificate from an authorised person, the exemption does not apply and the allowance would be taxable as normal earnings