The provision of living accommodation by employers has been in the forefront of tax issues for employers recently. This is because of the removal of the long standing non-statutory exemption for Representative Occupation by HMRC from April 2021.
It is an often misunderstood benefit and getting it wrong can be expensive for employers. It can be complicated both to establish the exemption or to calculate the amount of any taxable benefits.
Here are ten important things to be consider when providing living accommodation to your employees.
Where our clients provide living accommodation, these are some of the fundamental points we frequently have to help them with.
Often employers do not address the issues but simply follow “what we did last year” without considering the wider issues, even where exemptions may apply. There are other taxable benefits arising with the provision of living accommodation but these are frequently overlooked on the basis that “they must also be exempt”.
This is not a straightforward issue, the exemptions are difficult to understand and where taxable benefits do arise, they are potentially complicated to calculate. As explained at the outset, getting it wrong can be very expensive for employers and can cause problems with the affected staff, so it is important to make sure you take matters seriously. We advise taking specialist professional advice where there are any questions or doubts on this matter.
Independent Schools Newsletter - Autumn/Winter 2021