As a result of the unavailability of accommodation in the EU country in which temporary contract work is being undertaken, it may well work out much cheaper, for the worker to buy an apartment in the country in question, than to stay in hotels or find (non-existent!) rental.
The flat purchase would incur fees associated with the (UK) mortgage, monthly mortgage interest and monthly apartment service fees. It is unlikely that any appreciation in the value of the property would occur over the period (less than 24 months) involved.
Even so, the costs would be a fraction of even cheap hotel chain costs.
So - would the fees, interest and service charges all be allowable expenses ... plus any costs due to estate agents and tax on resale of the property ? Should the worker's company pay any of these directly rather than reimbursing (P11D) ?
Or would the taxman rather the worker use hotels and kill his (taxable) profits ?
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First Principles
The purchase of a flat is capital expenditure, therefore the cost plus associated fees would not attract a revenue deduction. That said, the company is likely to recoup most of its money on sale. A loss on the sale would be an allowable loss to set against other income. The annual running costs would be allowable though.
The provision of accommodation is a benefit chargeable on the employee under s102 ITEPA, but the employee can claim a deduction under the temporary workplace rules of s338, thus nullifying the benefit. The benefit would still need to be reported on P11D though.
Company not buying
No, it would be the contract worker buying the accommodation, since the company would not be able to finance the purchase. I have now inserted the necessary comma !