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restaurant accommodation to employee

restaurant accommodation to employee

Hello, I am new here. I wonder if anyone can help me because I am very confused about it.
I am running a small restaurant and I have 2 lower-paid part-time staffs (average weekly wages is £140).
I rent a flat for them to live and in the meantime use one room of the flat to store some business stocks.
Currently my employees live in the flat for free. I don't know if I need to treat part of the rent and council tax as their additional wages and report to HMRC?
Any help from you will be great appreciated.


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04th May 2012 15:35

Potential benfit in kind

On the face of it, this looks as if there could be a taxable benefit (provision of living accomodation), but if their earnings, plus the value of all benefits, come to less than £8500, there will be no tax charge. The value of the benefit will be the rent that you pay for the flat, apportioned by reference to the part occupied by each employee.

However if by living in specified accommodation they are able to perform better as employees (eg if the flat is above the restaurant, and they are expected to keep an eye on it when it is closed) they could be exempt from the benefit charge - check out HMRC booklet 480 Expenses & Benefits

What about other costs - gas/electricity, water etc? If you pay any of these bills it will almost certainly be a benefit, whether living accommodation is exempt or not.

If you conclude that there is a tax charge, all the figures need to be reported on forms P11D before 19 July.

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