accommodation benefit

by **russ23** on Mon Nov 07, 2011 7:38 am

If a company contracts with a 3rd party landlord and pays for the rent of a property on behalf of an employee (which is not required for completion of duties etc) I believe that it will just be the cost of the rent that is subject to the BIK rules (Class 1A NIC for employer and tax for the employee).

...If memory serves the £75k 'Living Accommdation' cost rule would only apply if the company owned the property.

Are both the above comments correct? Thank you in advance.

by **maths** on Mon Nov 07, 2011 7:12 pm

Agreed.

Technically BIK based on "rental value" defined in ss 105 and 110 ITEPA 2003, broadly market rent.

by **russ23** on Thu Nov 10, 2011 4:48 pm

thanks Math

by **russ23** on Thu Nov 10, 2011 5:07 pm

As the cost of the rent is a benefit (and definitely not required for performance of duties etc) presumably claiming a Corporation Tax deduction for the rent and Class IA NIC paid is probably pushing it...?

by **Incredulum** on Fri Nov 11, 2011 2:30 pm

It's a cost incurred wholly and exclusively for the purpose of retaining an employee, i.e. the trade, isn't it?

by **wamstax** on Fri Nov 11, 2011 2:41 pm

Wholly & Exclusively for the purposes of the trade I would call it and part and parcel of the remuneration package/benefits

by **russ23** on Fri Nov 11, 2011 7:20 pm

wamstax/Incredulum

Good points! As you say for employee retention and as such just a form of remuneration; on this basis we will treat as allowable.

Thanks