Board and Lodging Allowance

Board and Lodging Allowance

Didn't find your answer?

We have an employee (our daughter) who lives in our family home, they are on a monthly salary and we wish to make provision for board and lodging through her wages. What is the minimum that we can deduct and how do I account for it through the payroll?

Replies (6)

Please login or register to join the discussion.

avatar
By JazzySasha
07th Jul 2014 14:57

Payroll?

What you choose to ask your daughter to contribute towards the household expenses is between you and her - nothing to do with the fact that she may also be your employee.

 

If you must account for it through the payroll, then it is a deduction from her net pay. You then pay the agreed amount deducted to yourself and the balance of the net pay to your daughter as usual. 

Thanks (0)
By JCresswellTax
07th Jul 2014 16:32

What makes you think

You deal with personal expenditure through the company payroll?

I just like to know the logic people use sometimes.

Thanks.

Thanks (1)
avatar
By Jekyll and Hyde
08th Jul 2014 08:41

rent a room relief
When reading this I assume that your daughter is being paid a salary from the family company and then you will be charging her, as parents, and claiming rent a room relief on your tax returns.

Thus claiming a corporate tax relief and not incurring a personal tax charge.

If this is the case, I would keep both transactions separate and not include the deduction for rent on the payroll. Instead get her to set up a separate standing order for the rent. Linking the two is only going to make HMRC suspicious.

I am also assuming that the salary being paid is at a commercial rate and you are able to justify the salary, ie it is not just a tax fiddle.

Thanks (0)
avatar
By DerekChaplin
08th Jul 2014 09:33

NMW & Rent

Hi

Also check this out: https://www.gov.uk/national-minimum-wage-accommodation

If she is being paid minimum wage, there is a limit on the deduction possible, as too much will effectively reduce her wage to below NMW and you could be taken to an employment tribunal for the shortfall.

Always a good one that - especialy as the rate is so low.

Thanks (0)
Replying to SXGuy:
avatar
By MattG
08th Jul 2014 10:47

NMW Exceptions

DerekChaplin wrote:

Hi

Also check this out: https://www.gov.uk/national-minimum-wage-accommodation

If she is being paid minimum wage, there is a limit on the deduction possible, as too much will effectively reduce her wage to below NMW and you could be taken to an employment tribunal for the shortfall.

Always a good one that - especialy as the rate is so low.

Ah, but some people aren't entitled to NMW, including:

family members of the employer living in the employer’s homenon-family members living in the employer’s home who share in the work and leisure activities, are treated as one of the family and aren’t charged for meals or accommodation (eg au pairs)

https://www.gov.uk/national-minimum-wage/who-gets-the-minimum-wage

Presumably as they have specifically mentioned being charged for meals and accommodation for non-family members only then it isn't an issue for family members.

The son of one of my clients was so pleased I was aware of these exceptions....

Thanks (0)