The following Employment Tax guidance note Produced by Tolley in association with Philip Rutherford provides comprehensive and up to date tax information covering:
Employers may provide living accommodation to their employees by way of their employment. There is specific tax legislation that covers the provision of accommodation and the expenses associated with it.
In certain circumstances, a statutory exemption from tax is available for particular employments.
A tax liability on the provision of accommodation to an employee is imposed by ITEPA 2003, s 102. The section states that if accommodation is provided by way of his employment, for all or part of a tax year, then the cash equivalent of the benefit should be treated as earnings. The calculation of the cash equivalent is discussed below.
A liability can also arise under ITEPA 2003, s 62 as earnings where employers settle employee’s rents or provide special entitlements in relation to rent. This too is discussed below.
The term ‘provided’ should be given its everyday meaning; there are no specific legal definitions of it in relation to living accommodation.
The accommodation does not necessarily have to be provided by the employer. As long as the accommodation is provided by reason of the employee’s employment, even if it is provided by a third party, then a charge to tax will arise.
Living accommodation is also not defined, but it applies to houses, flats, houseboats, holiday villas and apartments. It should not be read to include non-living accommodation such as an office or garage.
Living accommodation should be differentiated from the provision of board and lodging, which is covered in the Lodging guidance note. Lodging is significantly more limited in its scope and refers to the provision of little more than somewhere to eat and sleep.
The charge to tax applies whether the accommodation is provided to the employee, or a member of their household or family, unless the accommodation is provided in the course of the employer’s domestic, family or personal relationships (in which case no tax charge arises). The benefit provisions for living accommodation can also apply if the accommodation is
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
IntroductionUK tax must be withheld on UK payments including:•interest•royalties•rental incomeWithholding tax may be reduced under double tax treaties (DTT) or European directives, both of which may be subject to making a formal claim.This guidance note outlines the rules for UK withholding tax, and
Summary of capital allowances on carsThe current capital allowance rates applicable to cars are as follows:Pool typeDescription of carRateLegislationMain rate poolNew and unused cars with CO2 emissions over 50g/km but not more than 110g/km (to be reduced to 50g/km and below from April 2021)18%CAA
Maintenance payments are payments made by a taxpayer to their former or separated spouse for the maintenance of that former spouse or their children. To obtain any tax relief for maintenance payments, one of the couple must have been born before 5 April 1935 and the payments must be made by virtue
Preparatory workBefore completing the Inheritance Tax account for submission to HMRC, the practitioner needs to undertake a comprehensive review of the extent of the estate and its proposed distribution. The work required leading up to the submission of the account is described in detail in the
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.