HMRC call for evidence on accommodation

Farm buildings_13087HMRC call for evidence on the tax treatment of employer provided accommodation

The NFU will be responding to a call for evidence from HMRC on the current tax treatment of employer provided living accommodation. If you are a farmer or grower who provides any of your employees with accommodation please spend 2 or 3 minutes completing a short survey. (All data collected will remain anonymous and confidential.)

We would also be interested in hearing members’ views or receiving more detailed evidence and we would also encourage members to respond to HMRC. Our member briefing sets out the issues, some areas which we believe are particularly relevant to the provision of accommodation to agricultural workers, and where members could assist us by providing further examples and information.

This HMRC call for evidence follows on from a report by the Office of Tax Simplification which suggested that this was an area of employment taxation that should be reviewed.

Until now HMRC have generally accepted that accommodation provided to an agricultural worker is not a taxable benefit for the employee. This is because they fall within one of two exemptions (or in some cases potentially both). The exemptions are:

-necessary for the proper performance of the job (the ‘necessary’ test which is a strict test where the employee has to live in that accommodation and no other in order to do their job.)

-customarily provided within that profession (the ‘customary’ test) for the better performance of the duties (the ‘better performance test’).



  • Posted by: Mark WarrenerPosted on: 20/01/2016 19:42:40

    Comment: Not only current employees ! I have a former employee, who gave 50 years service, still living rent free in his tied cottage despite retiring 15years ago. There was no entitlement to a pension back then, so a tied cottage for life was not uncommon. That now looks very generous with the way the housing market has gone. I don't begrudge it for a minute but there is a significant real cost nontheless
  • Posted by: Simon KingPosted on: 25/01/2016 09:57:20

    Comment: We have a number of current employees that live in tied accommodation. This is essential to have people on site to deal with stock and any emergencies that may arise. It helps with security in the farmyards and means that workers are close by for late night or weekend work. It was one of the main reasons that I chose this job. Not all agricultural workers are well paid and any change to the status quo would hit the poorer workers hardest and probably put people off going into agriculture.