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Autumn Budget 2017 - Employee Living Accommodation

23rd November 2017

Despite much expectation, no changes were announced by the Chancellor of the Exchequer in his Autumn Budget.

Where does this leave employers?

In the absence of proposed changes to the legislation, or any indication as to whether there will be any consultations or a further ‘call for evidence’, employers will need to consider the provision of accommodation to their employees based upon the current legislation.

It is important that employers correctly report the provision of any taxable benefits, which are made available to their employees, to HM Revenue & Customs. Failure to do so could lead to additional tax and National Insurance being due for payment together with interest and penalties.

What should employers be doing now?

Given that the onus is on the employer to ‘get it right’ what should employers be doing now?

Where accommodation is being provided to any employees you should, on a regular basis, consider the following:

  • Why is the accommodation being provided to the employee?
  • Is the accommodation being provided for the proper performance or better performance of the employee’s duties?
  • Are you confident that you are correctly applying the exemptions which may be available to certain employees?
  • Are you correctly calculating any benefit in kind charge?
  • Are you charging any rent for the use of the accommodation?
  • ow are you dealing with the utility costs in respect of employee accommodation?

Despite there being no proposed changes announced in the Autumn Budget if you have not reviewed your living accommodation arrangements in the past three years, then we recommend a review is undertaken to ensure:

  • you are fully optimising the exemptions currently available;
  • you are correctly identifying and calculating any benefit in kind charges;
  • whether reallocating accommodation will help to generate tax and National Insurance savings; and
  • your written housing policies are consistent with existing legislation.

Contact us

If you would like to discuss matters further, please do not hesitate to contact Nick Bustin, Director of Employment Tax on 020 7969 5578 or via email: nbustin@haysmacintyre.com or your usual haysmacintyre contact.

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