Certain staff have to live on the job in order to perform their duties adequately, such as a housemaster in a boarding school. In that case the provision of that accommodation is not treated as a taxable benefit for the employee.
Other employees may be provided with a home as it is traditional for their role, such as for a gamekeeper on a country estate. In this case the employer-provided accommodation will be a taxable benefit unless both these conditions are met:
- the accommodation is provided for better performance of the employee’s duties
- the employment is one of the kinds in which it is customary for employers to provide living accommodation to a particular class of employee
HMRC is reviewing all situations which rely on the customary test, to check whether the accommodation should be tax free or not. The customary test must be applied across the trade sector as a whole, not just for the specific employer alone. If less than half of employees in that type of employment are provided with living accommodation, then the perk is taxable.
If you have staff who are currently not taxed on the home they enjoy as part of their job, those arrangements should be reviewed without delay.