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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Living accommodation exemption: necessary for proper performance of the duties: types of employee

Section 99(1) ITEPA 2003

Part 3 Chapter 5 ITEPA 2003 does not apply to living accommodation provided for an employee if it is necessary for the proper performance of the duties that the employee live in the accommodation provided (see EIM11341).

The following types of employee may be accepted as being within the exemption:

  • agricultural workers who live on farms or agricultural estates. We accept that all of this type of employee qualify for exemption, although some will qualify under Section 99(2) ITEPA 2003 or as former representative occupier posts rather than under Section 99(1).
  • lock-gate and level-crossing gate keepers
  • caretakers living on the premises. This only covers those with a genuine full time caretaking job who are on call outside normal working hours (see note). It would not cover a shop employee who is allowed to live in the flat above the shop because the employer thinks this will discourage burglaries of the business premises.
  • stewards and green keepers living on the premises
  • wardens of sheltered housing schemes living on the premises where they are on call outside normal working hours (see note).


Recent changes to employment law and practice have in a number of cases removed the requirement for resident caretakers and resident wardens of sheltered housing schemes to be on call outside normal working hours. HMRC therefore no longer accepts that these types of employee automatically come within the exemption in Section 99(1) ITEPA. This change applies to resident wardens for tax years 2006-07 onwards and to resident caretakers for 2010-11 onwards.