What is the BIK of a Mon - Fri hotel?

What is the BIK of a Mon - Fri hotel?

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We closed down a subsidiary in the W.Midlands and moved the operation to our main site. The General Manager, who has specific skills essential to the operation, drives here on Monday and home on Friday. In between he lives, at the company's expense, in a hotel (pub!). The revenue have assessed us on the full value of the hotel bills; however I would have thought that the only benefit, given that he has to maintain his PPR throughout, was the value of his food saved as a result of not being at home. Everything else in connection with his PRR he still has to pay.
We do not want to prematurely rattle the revenue's cage; can anyone point us to the relevant parts of the Act please? Also any thoughts on the travel elements would be useful. Thanks in advance.
RICHARD WILLIS

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By NeilW
08th Jul 2005 19:23

Commuting
Because the trip on Monday and the return on Friday is classed as commuting, the hotel and subsistence bills in between can't be a business expense. They are incurred because the General Manager chooses to live a long way from his place of work. He has the option to move (and part of his relocation expenses could be paid by work tax free). Because he chooses not to move, the extra costs are a benefit to him (the benefit of not moving if you like).

Sorry, but that's the way the law is.

NeilW

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By AnonymousUser
11th Jul 2005 16:10

Just a thought ...
... this arrangement seems to have endured for some time for the Revenue to have picked up on it. If this had been a temporary arrangement while the manager changed residence the removals exemption in Chapter 7 ITEPA 2003 may have covered hotel & subsistence for the intervening period. It sounds like the arrangement is ongoing so this probably doesn't apply. Otherwise, the employee may not regard the hotel bills as a benefit as he still has the PPR to keep up, but the BIK rules apply irrespective. The removals exemption may have covered travel to and from the PPR but it doesn't sound as if he's removing and if there's no change of residence there cannot be any exemption.

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By User deleted
09th Jul 2005 18:15

Can't see how chancer's idea will work.

Travel and subsistence will still be taxable.

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