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HMRC internal manual

Employment Income Manual

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HM Revenue & Customs
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Employment income: board and lodging

Sections 62 and 203 ITEPA 2003

Broadly speaking, “board and lodging” means the provision of the employee’s meals, and somewhere to sleep. If the employee is provided with a self-contained living space with most of the facilities necessary for independent habitation, what is provided then is “living accommodation” within Section 97 ITEPA 2003 (see EIM11300 onwards). Section 97 does not apply to board and lodging.

The value of board and lodging provided for an employee is not earnings within Section 62ITEPA 2003. The employee cannot usually convert the benefit into money (see EIM00530 and Daly v CIR (18TC641)). However, for employees (other than lower paid employees for 2016/16 and earlier) the cost to the employer of providing the benefit, less any amount made good by the employee (see EIM21102), is treated asearnings by Section 203.

The position is different if the employee is entitled to a fixed wage, or salary, from which sums are deducted by the employer in respect of board and lodging. In that case, the gross wage, or salary, is the amount taxable as earnings within Section 62. The deductions made by the employer are not taken into account for tax purposes (see Cordy v Gordon(9TC304) and Machon v McLoughlin (11TC83)).

See example EIM01025.

As regards:

  • agricultural workers, see EIM50011
  • local authority officials, see EIM65805.