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HMRC internal manual

Employment Income Manual

Tax treatment of agricultural workers: board and lodging exemption for lower paid: text of concession

Extra-Statutory Concession A60

This ESC was withdrawn with effect from 6 April 2010

This page has the full text of Extra-Statutory Concession A60. This gives an exemption from income tax on board and lodging provided to lower paid agricultural workers provided certain conditions are met.

For more background to the concession see EIM50011.

The full text of the concession is:

“Income tax will not be charged on the value of free board and lodging provided for agricultural workers by their employers despite their entitlement to take a higher cash wage in lieu provided by the Agricultural Wages Act, where all the following conditions are satisfied.

  1. The worker, is not a director, or in employment to which Chapter II of Part V, ICTA 1988 applies.
  2. The contract with the employer provides for a net cash wage with free board and lodging.
  3. Where the board and lodging is not provided in the farmhouse, the employer has a contract with a third party for its provision and payments under the contract are made direct to the third party.

Where, instead of being entitled to a net cash wage and free board and lodgings, the worker is entitled to a gross cash wage, he is assessable on the gross amount even if the employer, with his agreement, deducts a sum to pay for his board and lodgings in the farmhouse or elsewhere.”

For the purposes of condition c above, a contract between the employee acting as agent for the employer and the third party providing the accommodation, is acceptable. Provided such a contract exists, no objection should be raised if the landlady is the mother of the employee concerned. The payments under the contract should be made direct to the landlady by the farmer. An arrangement whereby the farmer gives the employee a sealed addressed envelope containing the payment for board and lodging to be handed to the landlady should be accepted as meeting this requirement.

Condition a now applies where the employee is in an excluded employment, see EIM20007.