Income Tax (Earnings and Pensions) Act 2003 section 355

Deductions for corresponding payments by qualifying new resident employees with foreign employers

Section 355 sets out the conditions under which a qualifying new resident employee working for a foreign employer can claim a deduction for certain payments made out of their employment earnings.

• An employee who is not a qualifying new resident and who works for a foreign employer may claim a deduction from HMRC if four conditions are satisfied
• The employee must have made a payment out of their employment earnings that did not reduce their UK income tax liability but was made in circumstances where it would normally do so
• If HMRC is satisfied that all conditions are met, the payment may be allowed as a deduction
• The provision was amended by Finance Act 2025 to refer to qualifying new resident status rather than the previous domicile-based test