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HMRC internal manual

National Minimum Wage Manual

From
HM Revenue & Customs
Updated
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Accommodation and accommodation offset: when the accommodation offset does not apply

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, regulations 9 to 12(2)
* before 6 April 2015; National Minimum Wage Regulations 1999, regulations 30 to 35 

General

The accommodation offset (NMWM10020) only applies when an employer is both providing accommodation to a worker (NMWM10040) and that accommodation is regarded as living accommodation (NMWM10100).

When the accommodation offset does not apply the employer may still be making a charge for accommodation (either by a deduction from the worker’s pay or by taking a payment from the worker after they have received their wages). In these circumstances the charge must be taken into account when determining national minimum wage pay by using the national minimum wage deduction/payment regulations in the normal way.

Worker lives in accommodation provided by Employer

When an employer provides accommodation to a worker and the accommodation offset does not apply then any charge the employer makes for that accommodation is considered to be for the employer’s own use or benefit and the amount paid/deducted will not count towards the worker’s national minimum wage pay.

There are special provisions (NMWM10180) when:

  • council workers live in Council accommodation, and
  • workers whose employer is a registered Social Housing Provider live in their employer’s accommodation.

Worker lives in accommodation provided by a third party

When a worker lives in accommodation provided by a third party any charge the employer makes for that accommodation must be considered under the national minimum wage deduction/payment regulations in the normal way.

However, if the worker rents the accommodation directly from the third party and the employer is deducting the rent from their pay and paying it straight over to the third party, the amount of the deduction will not reduce the worker’s national minimum wage pay providing the amount is not expenditure connected to their employment. This is because the employer is neither benefiting from the arrangement nor having use of the money (NMWM10250). However, if the employer is using the money or benefiting from the arrangement in some way, (such as taking a commission or fee from the third party) then the amount will reduce the worker’s national minimum wage pay.

Other accommodation related charges must be considered on an individual basis using the national minimum wage deduction and payment regulations in the normal way.

For example, an employer cannot transfer his own liability for charges connected to accommodation (such as gas bills) to the worker. If the employer makes a deduction or takes a payment from the worker for this purpose then the amount will reduce national minimum wage pay as the charge will be regarded as for the employer’s own use and benefit.

There are special provisions (NMWM10180) for council tax and other accommodation related charges when:

  • council workers live in Council accommodation, and
  • workers whose employer is a registered Social Housing Provider live in their employer’s accommodation.