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Employees Housing Perquisites

Volume 929: debated on Thursday 7 April 1977

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asked the Chancellor of the Exchequer what are the Government's proposals for changes in the law following the report of the inter-departmental committee on the tax treatment of living accommodation and related services provided for employees.

Living accommodation provided for employees will in general be treated as a benefit liable to tax, whatever the level of their earnings. It will, however, be exempt from tax if:

  • (a) it is necessary to the performance of the employee's duties that he should occupy the accommodation; or
  • (b) it has been the practice to provide accommodation for employees of a particular class, and the accommodation is provided to enable the employee to perform his duties better; or
  • (c) the accommodation is provided for an employee in the public service for whom special security arrangements are in force.
  • Full-time working directors, and directors of charities and other non-profit making concerns, will, if they do not own more than 5 per cent. of the company's share capital, be eligible for exemption on the same basis as employees; and so will other holders of offices.Ancillary services—for example, heat, light and furniture—provided with accommodation will be taxable as a benefit in the hands of directors and higher paid employees and office-holders; but, where the accommodation is exempt from tax, the amount taxable will not exceed 10 per cent. of the emoluments of the employment. Legislation will be included in the Finance Bill to implement these proposals with effect from 1977–78.