Rules and Tax of Employee Accommodation in UK


Within some industries, especially agriculture, it is ordinary for accommodation to be given as part of the job, the business can guarantee the running expenses against assessment. In any case, giving accommodation for employees is a complex benefit when looking at the duty suggestions and the effect on their rates of pay. In this facts sheet we feature a portion of the more essential points, yet as the rules are unpredictable we prescribe that explicit exhortation ought to be looked for in individual cases. 

There may likewise be changes to the principles sketched out underneath, following a review of accommodation benefits by the Office of Tax Simplification and immigration solicitors Manchester outline in red the points to watch.

Types of Employee Accommodation:

1.  Board and Lodge:

Board and Lodge broadly means the arrangement of the workers meals and some place to sleep and does not apply to independent living accommodation.

Example 1 – Employee paid £900 every month, the business gives board and hotel yet deducts £150 every month from the compensation. The genuine expense to the business in giving the board and stop is £180 every month. The business must work PAYE on the full wage of £900 every month and afterward deduct the £150 with the goal that the worker is being saddled on the £900. There is likewise an advantage of £30 every month where the worker is being charged not exactly the expense to the business, this is assessable and ought to be pronounced on frame P11d.

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2.  Living Accommodation:

Living Accommodation is when an employer gives an employee with the use of a property with methods for autonomous living, for example, cooking offices and so on. Living convenience is generally an assessable advantage for the worker except if it falls under one of the following statutory exclusions;

  • Proper execution of the employee duties – where the worker needs to possess a specific property (instead of some other property) basically for the best possible performance of the duties of the employment.
  • Better performance of the worker's duties and where it is standard for a business to give settlement, as with farming specialists – to qualify the worker ought to have fast access to the work environment and be available to come back to work outside of typical working hours, OR
  • For Security reasons - you need to live there for insurance as your activity represents a risk to your own security, it is uncommon for this to apply.

3.  Tax of Employee Accommodation:

The Office of Tax Simplification have prescribed that HMRC survey the guidelines and fix the definitions to recognize what is a 'liven' and what is extremely important to take care of business, taking into record the accompanying key components; 

  • Whether the worker has essentially to live nearby to ensure structures, individuals or resources
  • Whether the worker frequently works extend periods of time
  • Whether the worker needs convenience due to regulatory prerequisites.