Incidental UK duties for non resident employees

A non resident employee pays UK tax only on earnings for duties performed in the UK. Section 39 of the Income Tax (Earnings and Pensions) Act 2003 (ITEPA) treats UK duties as performed abroad where the job is in substance an overseas one and the UK work is merely incidental to it, such as collecting instructions or arranging travel. UK work of the same kind or importance as the overseas job, including a director attending a board meeting, stays taxable.

Why does it make a difference where the work is done?

For a tax year in which an employee is not UK resident, section 27 ITEPA charges general earnings in respect of duties performed in the UK. The full amount of those earnings received in the year is taxable, whether or not the employment is still held when they are paid. Earnings for duties performed abroad are outside the charge. Residence itself is decided separately under the statutory residence test; section 39 only answers the next question, which is where particular duties count as performed.

HMRC’s Employment Income Manual at EIM40201 says that for most employees the place of work is simply a question of fact. It then lists special rules that deem duties to be performed in or outside the UK, and the merely incidental rule is one of them. The wider picture of how a non resident is taxed on UK income is covered in how non residents pay UK income tax.

What does section 39 actually say?

The section has two conditions, and both must be met:

1. In the tax year the employment must be in substance one whose duties fall to be performed outside the UK (section 39(1)).
2. The UK duties must be merely incidental to the performance of the duties outside the UK. If they are, they are treated as performed outside the UK for the purposes of Part 2 Chapter 5 ITEPA, which includes section 27 (section 39(2)).

Section 39(3) keeps the rule away from the seafarers’ earnings deduction, where section 383 has its own test for incidental duties. The rule does not turn a UK job into an overseas one. Someone whose real job is in the UK cannot rely on it, however much travel the role involves.

How does HMRC decide whether UK work is merely incidental?

EIM40203 asks you to start with the nature of the employment: what are the main duties, tasks and responsibilities? Against that background, UK work that is subordinate or ancillary to the work done overseas can be accepted as merely incidental. UK work that is of the same kind as the overseas work, or of equal importance if it is different, is not.

The leading case is Robson v Dixon (48 TC 527). A pilot employed by a Dutch airline flew from Amsterdam to many destinations and only occasionally took off from or arrived at UK airports. He argued that the small number of UK flights made his UK duties incidental. The courts disagreed: the test is one of quality, not quantity, and taking off and arriving were core duties of a pilot wherever they happened.

HMRC adds a practical limit. Where the employee works in the UK for more than three months in a year, EIM40203 says HMRC should not accept that the work can be merely incidental.

What kinds of UK activity can count as incidental?

EIM40204 says each case depends on its facts, but gives these as activities that can be regarded as merely incidental when carried out in the UK for an overseas employment:

• arranging meetings and business travel;
• feedback on employee performance or business results, provided the employee does no preparation or analysis while in the UK and this is not part of their core duties;
• input to team restructuring and staffing issues, provided the employee does not have a management role;
• reading generic business emails that do not relate directly to the employee’s own role.

HMRC’s examples fit the same pattern. A junior employee of an overseas subsidiary who visits UK headquarters only to present a report prepared overseas, and to receive instructions for the next tour of duty, is performing incidental duties. So is an employee who, while in the UK, does nothing more than arrange a meeting abroad and book the travel for it.

What UK activity is taxable work?

EIM40204 lists activities that HMRC does not regard as merely incidental:

• giving instructions or guidance to colleagues or team members;
• work on issues or projects, even ones that never come to fruition;
• reporting on performance or results where that is part of the employee’s core duties;
• analysing reports or information to produce results or recommendations for more senior staff;
• preparing for, or following up after, discussions, meetings or presentations with clients, colleagues, board members or shareholders;
• taking part in such discussions and meetings, including by telephone or video conference;
• generally applying the expertise the employee is employed to provide.

A tour courier who visits many countries performs core duties on every UK visit, however short. An employee of a European bank who answers a German customer’s investment enquiry while sitting in the UK branch is doing exactly the work the overseas job consists of, so that UK time is taxable.

Can a company director rely on the rule?

In HMRC’s view, almost never. EIM40203 explains that management of a company is vested collectively in the board, so attending a board meeting is a fundamental duty that cannot be incidental. A director whose work is otherwise abroad but who visits the UK to attend a meeting, formal board meeting or not, falls outside section 39. Attendance at finance, strategy or personnel meetings is also likely to be a substantive duty.

HMRC’s Example F is a director of a UK based multinational who usually joins monthly UK board meetings by video from abroad but sometimes attends in person. The in person attendance is not incidental, even though it is occasional. The payroll consequences are covered in PAYE for non resident directors.

How are the taxable UK earnings worked out?

Once the UK days that are not incidental are identified, the earnings for those duties have to be measured. HMRC’s example at EIM40222 apportions total earnings, including bonus and benefits, by UK workdays over total workdays, and notes that for a non resident only the UK share is chargeable under section 27.

Illustration only. Lena lives and works in Singapore for a Singapore company and is not UK resident. Her package is the equivalent of £90,000 for a year of 225 workdays. She spends 15 workdays in the UK:

UK workdays	What she did	Treatment
5	Collected instructions from the UK parent and delivered a report prepared in Singapore	Merely incidental, treated as overseas
10	Met UK clients, prepared proposals and followed up afterwards	UK duties, taxable under section 27

On a workday basis, £90,000 × 10 / 225 = £4,000 is UK earnings. If all 15 days had involved client work, the figure would have been £6,000. Whether tax is actually payable then depends on her allowances and on any treaty claim.

Can a tax treaty exempt UK work that is not incidental?

Often, yes. HMRC’s International Manual at INTM153170 explains that, under treaties following the OECD model, an employee resident in the other country is exempt from UK tax on UK employment income if all four conditions are met: they are not UK resident under the treaty, they are present in the UK for no more than 183 days in any twelve month period (some older treaties use a calendar or tax year instead), their pay comes from an employer that is not UK resident, and the pay is not borne by a UK permanent establishment of the employer. Directors’ fees are dealt with in a separate article. More on how treaties operate is in how double tax treaties work.

For employers, HMRC’s short term business visitor arrangement at PAYE82000 allows PAYE to be disregarded for treaty residents expected to be in the UK for 183 days or less in a twelve month period, subject to conditions about who bears the cost of their pay. The incidental rule is therefore most useful for directors’ non board work, for employees from countries with no treaty, and where the UK entity bears the pay.

What mistakes come up most often?

• Counting days instead of looking at the work. Robson v Dixon makes quality the test. Two days of client meetings are not incidental just because they are few.
• Treating video calls from the UK as harmless. HMRC lists meetings by telephone or video conference as substantive duties.
• Ignoring preparation and follow up. Work before and after a meeting is part of the meeting for this purpose.
• Assuming a director’s board attendance is incidental. HMRC’s view is the opposite.
• Applying section 39 to overseas workday relief. HMRC’s guidance on overseas workday relief says section 39 has not been extended to those rules, so incidental UK duties still count as UK work there.
• Keeping no evidence. EIM40203 says HMRC will look for the employment contract, job description, a summary of main duties, business diaries and travel details. A diary that records what was done on each UK day is the best defence in an enquiry.

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Related Accountapedia entries

• Non resident companies with UK rental income
• The Non Resident Landlord Scheme
• The SDLT non resident surcharge
• Non resident capital gains tax on UK property
• Tax Investigation Insurance for Non Resident Landlords

Related cover: Employers liability insurance: the legal requirements and Employers liability vs public liability.

Sources

• legislation.gov.uk: Act 2003 c. 1, section 39
• legislation.gov.uk: Act 2003 c. 1, section 27
• GOV.UK: Manual page EIM40201
• GOV.UK: Manual page EIM40203
• GOV.UK: Manual page EIM40204
• GOV.UK: Manual page EIM40222
• GOV.UK: Manual page INTM153170
• GOV.UK: Manual page PAYE82000
• GOV.UK: Manual page EIM43565

Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 24 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.