Usually the provision of accommodation to an employee is a taxable benefit when reporting to HM Revenue & Customs (HMRC), but there are exemptions, including the current, non-statutory, ‘representative occupier’ concession. However, this is being withdrawn in 2021.
Many employees provided with living accommodation have been treated as representative occupiers since 5 April 1977 and, provided circumstances have not changed, that exemption has continued to apply. It has also been allowed in cases where an employee has succeeded to a position carrying representative occupier status.
Now is the time for employers providing accommodation to staff to review their position to be sure that other statutory exemptions apply or whether that accommodation will become a reportable benefit from the start of the 2021-22 tax year.
Statutory exemptions that will continue to prevent a taxable benefit arising are accommodation being provided as necessary for the proper performance of duties; or as customary for the better performance of duties; or where there is a threat to an employee’s security.
For farms and estates, a number of roles typically might be relevant, such as a farm or estate manager, agricultural worker, gamekeeper or stalker for example. HMRC has agreed that agricultural workers living in employer-provided accommodation on farms or estates would retain the exemption as “necessary for the proper performance of duties” but other areas are not as clear cut.
We are advising that employers should review any arrangements where accommodation is provided to employees in line with their job function now, as specific and individual circumstances may have changed with regard to whether a charge applies from April 2021.
Where there is any doubt then further professional advice should be sought.