Income Tax (Earnings and Pensions) Act 2003 section 348

Liabilities related to the employment

Section 348 defines the types of liability connected to a person's employment that can qualify for tax relief when payments are made to cover them.

• A liability counts as employment-related if it was imposed on the employee because of something they did or failed to do while carrying out their job duties.
• This applies whether the employee was acting in their formal capacity as the holder of the employment or in any other capacity in the performance of their duties.
• A liability also counts as employment-related if it arises from legal or other proceedings connected to a claim that the employee is liable for something done or not done in the course of their employment.
• Both the underlying liability itself and any costs or liabilities arising from related proceedings can qualify as employment-related liabilities for the purposes of this relief.