Expenses and benefits: relocation costs

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What you do not have to report

Some relocation costs up to £8,000 are exempt from reporting and paying tax and National Insurance. These are called ‘qualifying’ costs and include:

  • the costs of buying or selling a home
  • moving costs
  • buying certain things for a new home
  • bridging loans

These are only qualifying costs when:

  • a new employee is moving area to start a job with you
  • an existing employee is changing their place of work within your organisation
  • the employee’s new home is reasonably close to the workplace and their old home is not
  • the costs are paid before the end of the tax year that’s after the one in which the employee started their job

For qualifying costs over £8,000, you may have to report and pay tax and National Insurance.

Bridging loans

For a bridging loan to count as a qualifying cost:

  • your employee (or members of their family) must sell their old home and buy a new one
  • it must be needed to bridge the gap between buying the new house and getting the money from their sale of the old one
  • it must be used only to buy the new house or pay off loans relating to the old home
  • it cannot be for more than the market value of the old home at the time the new home is bought