Income Tax (Earnings and Pensions) Act 2003 section 376

Foreign accommodation and subsistence costs and expenses (overseas employments)

Section 376 provides a deduction from employment earnings for the cost of accommodation or subsistence provided or reimbursed to a UK-resident employee who works entirely overseas.

• The employee must work wholly outside the UK, be UK resident, and (where the employer is foreign) must not be a qualifying new resident under the relevant statutory provisions.
• The earnings must include an amount for providing overseas accommodation or subsistence, or for reimbursing the employee's expenses on such accommodation or subsistence, to enable the employee to carry out their duties.
• A full deduction is given where the accommodation or subsistence is entirely for the purpose of performing the job; where it is only partly for that purpose, only the proportion properly attributable to the job qualifies.
• Where the employment is in substance an overseas role, any duties carried out in the UK that are merely incidental to the overseas duties are treated as performed outside the UK, so the deduction is not lost.