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HMRC internal manual

Employment Income Manual

Living accommodation exemption: the customary test

Section 99(2) ITEPA 2003

When considering an exemption from the living accommodation charge under Section 99(2)ITEPA 2003 (see EIM11346) the customary test should be examined first. Customary is not defined in the legislation and therefore has its ordinary everyday meaning. A practice is customary if it is recognisable as the norm and if failure to observe it is exceptional.

Consequently it is not enough to show that a custom exists in a particular employment with a particular employer. It must be shown that it is customary in that kind of employment generally for accommodation to be provided. You must consider employees holding similar positions with other employers. The test is satisfied where it is the normal practice to provide living accommodation for a class of employee. The onus is on the claimant to produce evidence to support his claim. (This content has been withheld because of exemptions in the Freedom of Information Act 2000)

For more information on what the Courts have said about the customary test see EIM11348.