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HMRC internal manual

Compliance Operational Guidance

Supporting Guidance: employer compliance: guidance by subject: working rule agreements (WRA): caravan accommodation provided by employee

The principle that employees who receive a lodging allowance must be broadly incurring matching expenditure COG930650 also applies where employees use their own caravans for lodging whilst away from their normal place of residence.

The full rate of WRA specified lodging allowances may be paid tax and NIC free to employees who use their own caravans provided the employee

  • qualifies for the tax free lodging allowance COG930660, and
  • pays a commercial site fee, for example, at a caravan site

you should ask questions to confirm that

  • the employee has paid commercial site fees where the full WRA specified lodging allowance rate is paid, or
  • a reduction in the lodging allowance rate has been made to reflect the fact that accommodation costs have not been paid and the fully reduced rate of lodging allowance is expended by the employee on meals. ((This content has been withheld because of exemptions in the Freedom of Information Act 2000)  

If you are unsure whether the lodging allowance should be paid without deduction of tax and NICs or the employer disagrees with your view you should follow the guidance in COG930750.

If the employer provides the caravan see COG930730.