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HMRC internal manual

Employment Income Manual

Living accommodation: brief outline of the legislation

Part 3 Chapter 5 ITEPA 2003

EIM11401 to EIM11520 deal with the measure under Part 3 Chapter 5 of the benefit of providing an employee with living accommodation. You should already have considered whether there are general earnings, whether the accommodation counts as earnings under Part 3 Chapter 1 ITEPA 2003 or is within the benefits code of Part 3 Chapters 5 or 10 ITEPA 2003. See EIM11302 and EIM00511 for a description of the issues you should have considered.

The main points to note about the provided living accommodation legislation at Part 3 Chapter 5 are that:

  • it covers all employees (including, for tax year 2015 to 2016 and earlier, those in lower-paid employment) (see EIM20007 and EIM11403)
  • it charges the employee to tax on the difference between the value to him or her of the accommodation and any rent he or she pays for it (see EIM11402)
  • it has important exemptions for job-related accommodation (see EIM11331) and
  • the cash equivalent of the benefit depends upon whether or not the cost of the property exceeds £75,000 (see EIM11428).