Employment Income - Accommodation

Question 1

If an employee is provided Job Related accommodation, how will they be taxed?

Answer 1

They won’t be - Job Related accommodation is exempt.

Question 2

What accommodation qualifies as Job Related Accommodation?

Answer 2

That which is:

• Provided for security reasons (i.e Prime Minister)
• Provided to be able to perform duties (i.e caretaker)
• Customary to be provided with that sort of work (i.e Pub Landlord)

Question 3

If accommodation is not job-related, how do we assess the benefit?

Answer 3

Step 1 - Basic Charge
Calculated as greater of: 
 - Annual Value
- Rental paid by employer
(minus rent paid by employee to employer)

Step 2 - Additional Charge
Calculated as:
(Cost - £75,000) x official interest rate

NOTE: If the employer acquired the property MORE than 6 years before the employee moved in, cost would be market value at start of tax year employee moved in.

Question 4

How is an employee assessed if accommodation living expenses are paid for by employer, and accommodation concerned is Job Related?

Answer 4

Lower of:

• Cost to employer
• 10% x (employment income + other benefits)

Question 5

How is an employee assessed if accommodation living expenses are paid for by employer, and accommodation concerned is NOT Job Related?

Answer 5

Cost of expenses to the employer.

Question 6

What expenses would qualify as accommodation living expenses?

Answer 6

• Heating, Lighting, Cleaning

- Repairing, Maintaining, Redecorating.

Question 7

How is an employee assessed when the employer provides furniture?

Answer 7

Annual value is taken as 20% of cost