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HMRC internal manual

National Minimum Wage Manual

From
HM Revenue & Customs
Updated
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Accommodation and accommodation offset: accommodation provided by the employer

Relevant legislation

The legislation that applies to this page is as follows:

For pay reference periods commencing

* on or after 6 April 2015; National Minimum Wage Regulations 2015, regulation 10
* before 6 April 2015; National Minimum Wage Regulations 1999, regulation 9

General

Living accommodation (NMWM10100) is regarded as being provided by an employer to a worker when at least one of the following situations applies:

  1. The employer is the worker’s landlord, either because the employer owns or rents the accommodation;
  2. The provision of the accommodation and the continuation of the worker’s employment are dependent on each other, for example;
* the worker must live in the accommodation as a contractual requirement, or
* the worker’s employment depends upon him living in the accommodation, or
* the provision of the accommodation is dependent upon the worker being engaged by the employer;
  1. The employer receives a monetary or non-financial benefit connected with the provision of the accommodation from the worker’s landlord or from an owner, director, office holder, business partner or shareholder of the worker’s landlord (or one of the landlord’s family members);
  2. The employer and the landlord are trading in association or are part of the same group of companies or businesses;
  3. The employer and the landlord have an owner, director, business partner, office holder or shareholder in common;
  4. An owner, director, office holder, business partner or shareholder of the employer receives a monetary payment or non-financial benefit connected with the provision of accommodation from the worker’s landlord or from one of the landlord’s owners, directors, office holders, business partners or shareholders (or one of the landlord’s family members).

Enforcing Arrears due to Incorrect Operation of the Accommodation Offset

In April 2007 the Department for Business, Innovation & Skills (NMWM02020) published guidance explaining when an employer is regarded as providing living accommodation.

When the only reason HMRC regards the employer as providing accommodation is because either [5] or [6] above apply, and there are arrears caused by the incorrect operation of the accommodation offset, then those arrears should only be enforced for pay reference periods starting on or after 1 April 2007.

In all other circumstances (including when situations [5] or [6] occur but there are additional reasons that would cause us to regard the employer as providing the accommodation because at least one of the situations in [1] to [4] exists) any arrears arising from the incorrect operation of the accommodation offset will be enforced in the normal way from the pay reference period in which they arise.

The accommodation must be provided to the worker personally. For example, accommodation provided to a member of a worker’s family would not be regarded as provided to the worker. However, it should be noted that for the accommodation offset rules to apply the accommodation only has to be provided by the employer - it does not have to be used by the worker.