HMRC consolidates guidance on taxing living accommodation given to employees

HMRC has published a consolidated version of How to tax living accommodation given to employees. The contents are as follows:

  • Basis of liability
  • Exemption: No tax charges for the provision of living accommodation will arise where:
    • (a) It’s necessary for the proper performance of the employee’s duties that they should reside in the accommodation.
    • (b) The accommodation is provided for the better performance of the employee’s duties and the employment is one of the kinds for which it’s customary for employers to provide accommodation for the employee.
    • (c) There’s a special threat to the employee’s security, special security arrangements are in force and the employee resides in the accommodation as part of those arrangements.
    • Section 314: Where exemption is due in any of the above circumstances it also extends to any tax charge that might arise for Council Tax, water charges or rates reimbursed to, or paid on behalf of, the employee concerned.