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E4.610 Living accommodation—main rules and exclusions

A benefit charge arises where living accommodation is provided for an employee, or for a member of their family or household, by reason of the employment¹ in any period which consists of the whole or part of a tax year and throughout which the employee holds the employment (the 'taxable period')². The main provisions relating to the living accommodation charge are at ITEPA 2003, ss 97–105. HMRC's view is that the charge applies if the accommodation is habitable and available, whether or not the employee occupies it³. The charge applies even where the accommodation is provided on arm's length terms (fair bargain)⁴.

There is no statutory definition of living accommodation, so it must be given its everyday meaning. Houses, flats, houseboats, holiday villas and apartments are all living accommodation; hotel rooms, etc are not⁵. Living accommodation provided for an employee by their employer is automatically treated as being by reason of the employment except where the employer is an individual