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HMRC internal manual

Compliance Operational Guidance

From
HM Revenue & Customs
Updated
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Supporting Guidance: employer compliance: guidance by subject: working rule agreements (WRA): action required when retention of rooms allowance paid

When an employer pays a retention of rooms allowance (retainer) as described at COG930710 without deductions, whether the payment is made:

  • to the employee or
  • direct to the provider of the accommodation

you should check that:

  • the employees concerned qualify for tax and NIC free lodging allowance COG930660 
  • the payments made are within the WRA retainer limits
  • the employer has applied the special tax and NIC arrangements correctly
  • and where required by the WRA, proof of payment by the employee is held by the employer.

Where any of the above conditions are not satisfied, you should

  • advise the employer of the correct procedure for the future and
  • seek recovery for earlier years, where appropriate.

Note that the method of payment will determine the advice given and how recovery is made

  • if payment is made to the employee this is a cash earnings whereas
  • payment direct to the accommodation provider is a benefit in kind or pecuniary liability.

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