Tax Free Accommodation

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Hi

Sorry, I'm new here but I wondered if anybody could advise as I'm getting myself in a bit of a tizz.

We have a group of employees whom are entitled to tax free accommodation while working at site A. They are now undertaking a secondment at site B and have been told they can also claim accommodation allowance tax free for both site (current site and permanant site to ensure they can hold on to their digs).

I think we should probably pay one taxable and one tax free, but others don't agree. (It's £303 per week per site, so not a small amount). Although Ideally I'd rather pay the perm site at taxable retainer rate and full rate at the current site, but I'm getting nowhere with that suggestion.

We work under the ESCA agreement if that helps?

Thank you in advance for any guidence.

 

Replies (6)

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By Cylhia66
13th Feb 2024 20:28

You have a group of employees to whom you offer tax free accommodation and you don't have an accountant?

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By David Ex
13th Feb 2024 20:33

Jenijen81 wrote:

I think we should probably pay one taxable and one tax free, but others don't agree. 

What basis for their views have they offered?

It's complicated and I don't know the answer but struggle to see paying some kind of property retainer is a tax-free payment.

https://www.gov.uk/guidance/ordinary-commuting-and-private-travel-490-ch...

The amounts involved are not insignificant and I wouldn't take the risk of guessing.

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By FactChecker
13th Feb 2024 20:50

Sorry, it's late in the evening but what's an "ESCA agreement"?
Nothing to do with Extra Statutory Concessions presumably - but if it is then please be a lot more specific?

Anyway a lot more detail would be required even to a hazard a guess at the outcome here ... and you need more than guesses, which is why your accountant (who must be privy to all the facts) should be advising you.

Hint: unless you can show (in a way that I can't imagine) how an employee can be concurrently working at 2 different sites (which presumably are a considerable distance apart from each other), then it's hard to see how both payments (or maybe either) can be tax-free ... but talk to your accountant.

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Replying to FactChecker:
RLI
By lionofludesch
13th Feb 2024 21:02

FactChecker wrote:

Sorry, it's late in the evening but what's an "ESCA agreement"?
Nothing to do with Extra Statutory Concessions presumably - but if it is then please be a lot more specific?

East of Scotland Cricket Association.

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By Tax Dragon
14th Feb 2024 11:07

Jenijen81 wrote:

[They] have been told they can... claim accommodation allowance tax free...

Accommodation allowances (if you meant what you wrote) are almost always taxable. (There is an exemption for the military. No others are springing to mind.)

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