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On the threshold

29 September 2009 / Penny Bates
Issue: 4225 / Categories: Comment & Analysis , Employees , Income Tax
PENNY BATES returns to first principles with an explanation of the tax charges relating to accommodation and related assets provided by an employer

KEY POINTS

  • The basic charging provision and main exemptions.
  • Calculating the cost of providing accommodation.
  • The benefit charge and the £75 000 threshold.
  • Accommodation expenses and other household assets.
  • Planning points and removal expenses.

The key when buying a property is said to be ‘location location location’; but ‘taxation taxation taxation’ is what is levied against many employees provided with living accommodation by their employer.

The specific wording of ITEPA 2003 s 102(1) – ‘benefit of living accommodation treated as earnings’ – sets out the basic tax charge.

‘(1) If living accommodation to which this Chapter applies is provided in any period:

(a) which consists of the whole or part of a tax year; and

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