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Our client is a farming company with large farming interests in Lincolnshire and Yorkshire. The company employs a farm manager who lives in a house on the Lincolnshire farm. He has some duties at the Yorkshire farm, but most of his time is spent in Lincolnshire. We have claimed that the manager should be exempt from the accommodation tax charge. The Inspector of Taxes disagrees. We have argued that two of the three possible conditions for exemption are met.

First, under TA 1988, s 145(4)(a) — 'necessary for proper performance' — our client maintains that it is essential for both security and working reasons. It is common ground that that there is no local police presence and the farm stores are a frequent target for thieves and vandals. The manager also needs to be on hand to supervise late night movement of lorries and farm machinery. The Inspector has argued that a house in the nearby village would serve just as well. Our client believes that a full-time presence on the farm is essential and the only way of deterring trespassers.

Secondly, s 145(4)(b) — 'necessary for better performance' — the above argument serves just as well. There is also the additional condition that it is customary for that sort of employment. It is true that farm manager is not one of the classes listed on the Inland Revenue website. We are not able to comment on whether it is customary on a national basis, but we believe that it is accepted practice in these parts. Does this qualify as 'customary'?

Readers' views are sought on whether either argument might prevail and if they can be added to.

(Query T16,505)

Issue: 3982 / Categories: