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Sam
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We have a flat on our country estate that we wish to provide

Resolved Question:

We have a flat on our country estate that we wish to provide for free to the owner of a country estate maintenance company who will provide us 4 "man days" per week (not necessarily him working for us, maybe some of his team) of estate maintenance services in exchange for free.What are the tax implications?
Submitted: 3 years ago.
Category: Tax
Expert:  Sam replied 3 years ago.
Hi

Thanks for your question, I am Sam and I am one of the UK tax experts here on Just Answer.

As I cannot see any real need for them to be on site,(unlike a light house keeper in the olden days ! or a headmaster of a boarding school) then a benefit in kind will arise which the estate maintenance company will need to declare for their employees, as being provided by a third party.


From your point of view as the provider of the flat as you will not receive any rents from this arrangement, you have no further tax position to consider. But will need to provide the employer with the following details to calculate the benefit arising on each employee.

Full address of property
Value of property (if in excess of £75,000) or it is not, then state it is worth less than £75,000
Rentable value of the accommodation had it been let out

Then the company taking this work can deal with the tax position of his/her own employees for P11d completion (for the benefit provided)

Whether there is scope for them to argue there is no taxable benefit arising, is something they will need to look into, as this question was regarding your position.

Thanks

Sam




Customer: replied 3 years ago.

Thanks Sam. It seems clear that we have no tax obligations here (but correct me if I'm wrong). In terms of his tax obligations, my Google searches (sic) have told me that an employee would get the accommodation tax free if it were essential to his role. I'm not sure whether this would also apply if the individual were a nominated tenant from the property maintenance company...(would it?). And I'm not sure whether as a tree surgeon he could be deemed essential to be on site (on basis that in last storm we have lost c.8 trees, some dangerously close or on the house so "emergency tree surgeon" must be living in flat...). Would this idea be laughed at by the tax man (it's actually seriously suggested by me)?

Expert:  Sam replied 3 years ago.
Hi

Thanks for your response

When HMRC use the term essential it means that they are needed to live on site so they can perform their duties - as indicated above with the headmaster of a boarding school, or a live in carer, or many moons ago, pre computerisation, with light house keepers -
This (I doubt) would constitute essential, as they could either come to work each day from home, or if the company is not local, then the employer pay for digs for them to be within the locality.

And as you then further advise they are tree surgeons, then no, they are not going to be required to work at night (although they may choose to) or be on call at night for any emergencies, in order for them to perform their duties in the same way that a boarding home staff member, or live in carer would! Its convenient for them to stay on site - in my opinion. Even with the danger posed by the current storm damage - as one would assume at the end of each working day, they would leave each tree they have partly worked on, safe and secure until the next day - to avoid any damage to your property.

And as an ex HMRC employee - they will not laugh at the suggestion, (as nothing ventured nothing gained!) but they would have no grounds on which to agree this is exempt accommodation.

But on the plus side, the benefit between all employees for the period of time in question, may be negligible - and the company have the option of requesting a PAYE settlement agreement with HMRC to cover said cost - is a lower enough amount - which is why I also advise that the company need to explore the position further with HMRC.

Thanks

Sam






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