Employers sometimes provide employees with assistance when they have to move home to take up a new job or when there is a change in the location of their existing job. Such assistance might include:
- paying the fees connected with house sale and purchase
- meeting the cost of travel to the new location for house hunting trips
- paying for the costs of moving household furniture and effects.
There is an exemption that removes tax and NICs liability on certain removal expenses and benefits up to a limit of £8,000.
The conditions that must be met to qualify for this exemption fall into three main categories:
- conditions relating to the change of job and home
- conditions relating to the type of expense or benefit
- time limit.
Unless specified, each condition applies for tax and for both Class 1 and Class 1A NICs. All of the conditions must be met for the exemption from tax and NICs liability to apply.
Some costs of relocating do not qualify for the exemption. Follow this link for costs that do not qualify.
Follow this link to an example that shows how the exemption works for tax and this link to a NICs example.
For guidance on:
- management fees to relocation companies, look at EIM03128
- guaranteed sale price schemes, look at EIM03130
- sale of the employee's home to the employer, look at EIM03127
- a car or van provided in connection with the relocation, look at EIM03119
- the payment of scale rate allowances, look at EIM03139.
The exemption applies to expenses met and benefits provided by the employer. There is no equivalent tax relief for costs met by an employee.
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