SE31618 - Deductions from emoluments, expenses and benefits: deductions from expenses and benefits - example of deduction from living accommodation charge

An engineer who lives in Manchester is required by her employer to work at a site in Cornwall that is a temporary workplace. She works there for 3 months in 1998/99 and her employer rents a house for her in St Ives for 4 months. For the last month she brings her husband and family to St Ives for a holiday. The house rental is £1,200 per month.

There is a benefit charge on the employee under Section 145 ICTA 1988 for the living accommodation provided by the employer, see SE11301. The amount of that benefit is the rent paid by the employer, see SE11431. A deduction is permitted from that benefit charge by Section 145(3) to the extent that a deduction would have been available under Section 198(1) ICTA 1988 if the accommodation had been paid for by the employee out of her own emoluments, see SE31615.

For 3 months any travel costs are attributable to qualifying business travel, see SE32015. Travel costs include the cost of the accommodation in that period, see SE31815. The cost of accommodation in the last month is not attributable to qualifying business travel.

The net benefit charge for 1998/99 is computed as follows.