Income Tax (Earnings and Pensions) Act 2003 section 327

Deductions from earnings: general

Section 327 introduces the framework for deductions that can be made from an employee's taxable earnings when calculating their net taxable earnings for income tax purposes.

• Deductions from taxable employment earnings are used to arrive at net taxable earnings for a given tax year, which forms the basis of the income tax charge under Part 2 of the Act.
• Five categories of deduction are provided for: employee's expenses, benefits code earnings, fixed expense allowances, earnings representing benefits or reimbursed expenses, and seafarers' earnings.
• Additional deduction provisions exist elsewhere in the legislation, including mileage allowance relief and capital allowances treated as deductions from earnings.
• Further deductions from income (including employment income) are available for payroll giving and contributions to registered pension schemes under the Finance Act 2004.