Expenses and benefits: accommodation

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What to report and pay

If the accommodation you provide is not exempt, you must report it to HM Revenue and Customs (HMRC).

Accommodation

This includes any accommodation you provide, even if the employee does not actually use it (see technical guidance for details).

You must:

You can get tax relief if you provide accommodation for an employee at their temporary workplace for up to 24 months. You’ll still need to report this.

If you provide accommodation because of coronavirus (COVID-19)

If you provide accommodation for an employee at their permanent workplace because of COVID-19, you must also report on form P11D.

If you’ve agreed to pay back your employee’s subsistence and lodging expenses because they cannot return home, you can either:

Council Tax, water and sewerage charges

If your employee covers the cost and you reimburse them, you must:

  • add the amount you reimburse to their earnings
  • deduct and pay Class 1 National Insurance and PAYE tax through payroll

If you cover the costs directly, you must:

  • report on form P11D
  • deduct and pay Class 1 National Insurance (but not PAYE tax) through payroll

Furniture, heating, lighting, maintenance

This covers:

  • heating, lighting, cleaning
  • repair, maintenance, decoration
  • furniture for daily use
  • staff for upkeep, for example gardeners, cleaners

You do not need to report furniture, heating, lighting and maintenance costs if the accommodation is for a close relative and it is not related to their job.

Do not deduct costs for any structural alterations or repairs that you legally have to make as a landlord.

If your employee covers the cost and you reimburse them, you must:

  • add the amount you reimburse to their earnings
  • deduct and pay Class 1 National Insurance (but not PAYE tax) through payroll

If your employee arranges the supplier contracts but you cover the costs, you must:

  • report on form P11D
  • deduct and pay Class 1 National Insurance (but not PAYE tax) through payroll

If you arrange the supplier contracts and cover the costs directly, you must: