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Jo C.
Jo C., Barrister
Category: Law
Satisfied Customers: 32086
Experience:  Over 5 years in practice
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We have a query about our employment contract concerning our

Customer Question

We have a query about our employment contract concerning our tied cottage combined with all Utility Bills covered by our employer. We have been working for our current employer for the past 14 years with all above being paid for by our Employer as stipulated by our Contact with them. as well as our Cottage being provided by them to live in; rent free for the term of our working for them! However our Employers Accountant, now wishes to change the terms of the Contact by adding up the cost of Cottage Utilities combined and add this sum, together with the 40% Income Tax and add this to our Gross Salary, and then to deduct the appropriate sum each month after paying the Tax. We simply don't understand why this should be necessary after all these years, especially as in all our previous employment; this procedure hasn't been necessary. Could you help explain to us why this should suddenly be necessary. We must add that our Employer is now a very old man and has Parkinson's Disease, is very frail and in fact now lives at hi second home in Scotland, and also has a trust set up to manage hi various Financial affairs! We have discussed this request with him which came direct from his Accountant to us, and he didn't know anything about this and told us to do nothing, unless he told us otherwise! However we are now getting completely differing requests from his Accountant saying that the above procedure is necessary and for us to inaugurate our own Payment of The utilities! Therefore we would like your advice please if possible as to how best to proceed. Many thanks J.R.Wardle.
Submitted: 3 years ago.
Category: Law
Expert:  Alex J. replied 3 years ago.

Thank you for question and welcome.

My name is AJ and I will assist you.

How do you currently pay tax on your salary? Is it through PAYE?

Kind regards

Customer: replied 3 years ago.

Dear Aj many thanks for starting to answer my question! The answer is, yes we do currently pay tax on our Salary through. Regards John Wardle.

Customer: replied 3 years ago.

Dear Aj - sorry I forgot to add PAYE! John Wardle.

Expert:  Alex J. replied 3 years ago.

Thank you.

Ultimately are they suggesting that they pay you an additional sum of money each month that you are taxed on and then you pay "rent and utilities" to your boss in lieu of that sum of money?

The reason why they are insisting on this is because you are receiving a benefit which is potentially taxable. Therefore it would make sense for them to pay you an additional sum for you to then pay tax on that sum as rent.

How much are the rent and "utilities" worth?

Kind regards