HMRC internal manual

Employment Income Manual

Accommodation: employee allowed to sub-let

Part 3 Chapters 1, 5 and 10, ITEPA 2003

An employer may own or rent accommodation and provide it to an employee. If the employee is allowed to sub-let the accommodation it represents money’s worth to the employee. The accommodation gives rise to an earnings charge within Section 62 ITEPA 2003 and the employee is chargeable under Section 6 ITEPA 2003 on the amount for which the accommodation could be sub-let. This applies whether or not the employee actually sub-lets the property.

In practice you will not come across this very often, because employees are not usually given the power to sub-let accommodation provided by their employer.

Where the accommodation is board and lodging consider if there is a further employment related benefit under Section 201 ITEPA 2003 (see EIM01020 and EIM21101).

Where the accommodation is living accommodation consider if there is also a benefit under Section 102 ITEPA 2003 (see EIM11311).