My prospect organises boating holidays in the UK where the boat has a small crew. All sailing is undertaken in the daytime only.
I wonder if anyone has a view on the BIK aspect of them all receiving free food drink and accommodation. Would the treatment be different for the skipper, the cook and the maintenance engineer? In the past the maintenance guy has not had a berth as most of the work is undertaken out of season.
Replies (3)
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Definition of accommodation
There are a few points to consider here:
a) Is the berth provided considered "living accommodation"?
This is a question of fact and we would need more information. HMRC EIM11321 provides some guidance. If it is considered living accommodation, a charge will arise under s97 ITEPA 2003 but an exemption may be available (s99) if you can argue it is customary to provide the accommodation and it is for better performance of duties.
b) If not "living accommodation" a taxable benefit may arise under Pt 3 Ch 10 ITEPA 2003
Provision of accommodation that is not caught by s97 ITEPA 2003 may be caught by Pt 3 Ch 10. However, s316 will prevent a charge if the private use of the accommodation is not significant.
I don't believe there is a specific benefit provision for food/drink so it is likely to be caught by Pt 3 Ch 10 if not as general earnings. However, the exemption for accommodation under s316 can also apply to supplies and services which may cover the food/drink provided.
Key questions to consider:
- Is the accommodation available year around or only around sailing periods;
- What is the extent of private use of accommodation / food & drink;
- What is the nature of the accommodation: is it simply a berth or are, e.g., cooking facilities available?
Hopefully this gives you some direction. The above of course assumes that the individuals are resident in the UK and the holidays do not involve travel to other countries.
Accomodation..
Are you talking about a berth on the boat or overnight accomodation in a hotel somewhere nearby?
As a first thought (without detailed research) I would say at the very least food on the boat during the working day would be job-related and not a benefit at all.