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HMRC internal manual

Employment Income Manual

Particular benefits: heating, lighting, cleaning etc. expenses of job-related living accommodation: 10% limit: example of calculating the net amount of the earnings: employee makes good part of the expense of providing the benefits

The employee’s salary is £15,000 a year.

The employee is entitled to a deduction of £800 for expenses within section 336 ITEPA 2003 (see EIM31620 onwards).

In the year, the employer paid £1,650 for heating, lighting and internal decorations of the job-related accommodation (exempt under section 99 or section 100 ITEPA 2003 (see EIM11331) but the employee reimburses the employer £350 of this expenditure. So the net cost to the employer was £1,300 (£1,650 − £350).

The employment income will be:

| Item | Amount | | ————————————————————————————————————————————— | ——- | | Salary | £15,000 | | less deductible expenses | £800 | | Total | £14,200 | | Heating, lighting and internal decorations
(£14,200 × 10%) − £350 (“made good”) = £1,070
£1,070 is less than the net cost of £1,300 | £1,070 | | Employment income | £15,270 |