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HMRC internal manual

National Insurance Manual

Class 1 NICs : Expenses and allowances : Non exempt relocation expenses

The following are all expenses which are not exempt. They are taxable in full and arealso liable for Class 1 NICs from 6 April 1998. But see NIM06125where the employee relocated prior to 6 April 1998.

Additional Housing Cost Allowances

Where the employer pays for the extra costs of living in a more expensive location.These are usually paid regularly over a period of time with salary.

Loss on sale of property

This could be either because the value of the property has fallen, or because theemployee has to sell quickly for less than the market sale price.

[Note that section 326 ITEPA 2003 (previously ESC A85) excludes some arrangements wherethe employee transfers beneficial interest in the property to his employer or relocationcompany - see EIM03127 (previously SE03127). Any payment made for a shortfall between theguaranteed sale price realised to the employee and the final selling price are similarlyexcluded from NIC liability.]

Anything else the employer pays that is not included in section 272 ITEPA 2003 (or,for periods before 6 April 2003 is not a qualifying allowance within the meaning ofSchedule 11A ICTA 1988).

For example:

Counselling services

Redirection of mail

Council tax bills

Compensation for loss in value of season tickets

Cost of joining new sports clubs

Penalties for giving insufficient notice of child’s withdrawal from school –loss of school fees

Cost of buying new school uniforms

Help towards an employee’s spouse finding a job – career and educationcounselling/job search agency

Home search facility

Financial advice

Nanny agency fees

House cleaning on sale

House cleaning on purchase

Spouse’s loss of earnings

Help with starting a garden

Transporting and kennelling for domestic animals (unless directly related to the actualfamily move from the old to the new location).

This list is not exhaustive.