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HMRC internal manual

Employment Income Manual

Accommodation: continuing right to higher wage instead

Section 62 ITEPA 2003

An employer may own or rent accommodation and provide that accommodation for the use of an employee. In some cases the employee will have the right at any time not to have the accommodation benefit but to choose to have a higher salary instead. In such a case, whichever option the employee chooses, the higher salary counts as earnings within Section 62. This follows from comments made in the case of Heaton v Bell (46TC211) (see also EIM00570).

Where the accommodation is board and lodging consider if there is a benefit under Part 3 Chapter 10 ITEPA 2003 (see EIM01020).

Where the accommodation is living accommodation consider if there are earnings under Section102 ITEPA 2003 (see EIM11311).

This type of case is common in the agricultural and horse racing industries. Where the accommodation is board and lodging there is a concession covering lower paid employees for 2009/10 and earlier, broadly those earning at a rate of less than £8,500 a year. For agricultural workers see EIM50011. For stable lads see EIM68502.