Produced by Tolley in association with Philip Rutherford
  • 25 Feb 2022 15:48

The following Employment Tax guidance note Produced by Tolley in association with Philip Rutherford provides comprehensive and up to date tax information covering:

  • Lodging
  • Introduction
  • Lodging
  • Special circumstances
  • Interaction with national minimum wage (NMW) / national living wage (NLW)
  • Local authority officials and employees
  • Carers
  • Interaction with expenses
  • Reporting requirements



Where an employer provides an employee with living accommodation or some form of board and lodging, there may be a taxable benefit depending on the nature of the provision of the benefit. There is, however, a wide range of exemptions from the charge to tax.

This guidance note is specifically concerned with the provision of lodging as opposed to the provision of living accommodation. There is detailed information on the provision of living accommodation in the Living accommodation guidance note.


An employer provides lodging if he provides the employee with a place to sleep along with meals.

This is different to the provision of living accommodation, which is where the employer provides for the employee accommodation that is sufficient to allow the employee to live domestic life independently without any reliance on others for his basic needs.

The provision of lodging is more common in some industries than others, eg in agriculture and construction.

The cash equivalent of the benefit of lodging provided by an employer is taxable under ITEPA 2003, s 203.

The cash equivalent of the benefit is the cost to the employer for providing the lodging, less any amount made good by the employee. From 2017/18 onwards, in order to reduce the amount of the taxable benefit, any amount made good must be paid on or before 6 July after the end of the tax year in question. Any amount made good later than 6 July is disregarded.

If the employer deducts money from the employee’s salary to cover the cost of

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