18 April 2019 Caroline Jones, Employment tax director
BUFDG has recently met with HMRC and one of the topics of conversation was the recent notice in relation to accommodation. HMRC has reiterated that it is only the customary exemption that is affected by the change. Some universities will be able to rely on the exemption offered by representative occupier instead. HMRC considers the main issue to be evidencing that the role of the employee to whom the accommodation is provided has remained unchanged since 1977. We also obtained confirmation from HMRC that it was not necessary for the current incumbent of a post to occupy the same accommodation as that occupied in 1977 and that provided the employee does not vacate the property, say during a period of refurbishment, for more than 6 months this would not affect the exemption. Any periods of more than 6 months would need to be submitted to HMRC for consideration.
We have updated our guidance to reflect this.
Alternatively, as detailed in BUFDG’s guidance on accommodation, it may be possible to claim an exemption under S99(1) ITEPA 2003 where it is necessary ‘for the proper performance of duties’ for an employee to be required to live in particular accommodation. In these cases HMRC has asked for the following information to be supplied for each individual claim/role.
1. A copy of the latest Recruitment Advert.
2. A copy of the contract of employment/engagement with details of remuneration package for each role. If there is no contract of employment – provision of the agreement under which the accommodation is provided.
3. Details of the specific duties that require employees to live in that accommodation and ‘no other’.
4. Do the employees contribute to the accommodation provided?
5. A full description of the accommodation provided to each employee.
6. Copies of any incident reports completed by the employees to whom the accommodation is provided (suitably anonymised to protect the identity of the students) for the last 3 months. Also copy of ‘call out rota’ for the last 3 months.
7. Do the employees have alternative residences or do they live in the provided accommodation full-time?