Commentary on Sections Glossary Part 2: Employment income: charge to tax Section 35: Relief for delayed remittances
136.This section provides relief for employees whose earnings are taxable when remitted to the United Kingdom and who have been unable to remit their earnings in an earlier year because of local law or the impossibility of obtaining currency that could be transferred to the United Kingdom.
137.It derives from section 585 of ICTA.
138.Subsection (1) allows a claim for relief for delayed remittances. The claim may be for all or part of the delayed remittances. See Change 5 in Annex 1.
139.Subsection (2) defines “delayed remittances” as earnings which are taxable when remitted to the United Kingdom, were received in an earlier year but remitted to the United Kingdom in a later year and which could not have been remitted before that later year.
140.Section 585 refers to income “arising”. This becomes “income received” in this section to reflect the receipts basis used for Schedule E. See Change 6 in Annex 1.
141.In section 585(1)(c) the third condition for a claim to be made is that the inability to transfer the income to the United Kingdom “was not due to any want of reasonable endeavours” on the part of the employee. This condition has been omitted in rewriting this subsection. See Change 5 in Annex 1.
142.The final condition in section 585(1)(b) is the impossibility of obtaining foreign currency in that territory. “Foreign currency” has been rewritten in subsection 2(c)(iii) as “currency other than the currency of that country or territory”. See Note 11 in Annex 2.
143.In rewriting that same condition the words “that could be transferred to the United Kingdom” have been added. See Change 5 in Annex 1.
144.Subsection (3) explains the result of the claim for relief. The amount chargeable for the tax year in which the delayed remittances are received in the United Kingdom is reduced and the amount of the reduction becomes chargeable for an earlier year. The amount allocated to earlier years is in accordance with either subsection (4) or an election under section 36 (election in respect of delayed remittances).
145.Subsection (4) sets out the allocation to tax years if no election is made. In cases where the employment income of only one year cannot be remitted the amount of the income remitted in a later year is treated as if it had been remitted in the year in which it was received. The same applies when there is more than one year in which the income was received.