HMRC call for evidence on the tax treatment of employer provided accommodation
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’).