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Three months to prepare for withdrawal of ‘representative occupier’ concession

9 December: ICAEW’s Tax Faculty provides a reminder that from April 2021 the ‘representative occupier’ exemption from the employer-provided accommodation benefit-in-kind charge will cease.

In March 2020, the government announced that it was withdrawing the ‘representative occupier’ exemption after identifying it as an ‘extra statutory concession… not compatible with [HMRC’s] powers of collection and management’.

The exemption relates to employees living rent-free in accommodation provided by reason of the employment and required to reside in the property through a condition of their contract. Examples of such employees include grounds keepers or estate stewards.

The long-standing concession relates only to posts that existed prior to 6 April 1977. Meaning that those working in establishments created after this date would not be entitled to claim the exemption.

After a public call for evidence, HMRC concluded that it should be withdrawn as legislating the concession would ‘enshrine unfair practices’.

Where an employee is a representative occupier, going forward they may qualify under one of the statutory exemptions for tax and NIC on accommodation provided by their employer. These include where:

  • the provision of accommodation is necessary for the proper performance of the employee’s duties;
  • the accommodation is provided for the better performance of the duties of the employment, which is one of the kinds of employment in the case of which it is customary for employers to provide living accommodation for employees;
  • there is a special threat to security and the employee resides in the accommodation as part of special security arrangements; or
  • a local authority provides accommodation to an employee on the same basis as to an ordinary member of the public.

HMRC has confirmed that categories of employee fall within the statutory exemptions, include:

  • agricultural workers who live on farms or agricultural estates;
  • lock-gate and level-crossing gatekeepers;
  • caretakers living on the premises (with a genuine full-time caretaking job who are on call outside normal hours);
  • stewards and green keepers (living on the premises);
  • wardens of sheltered housing schemes (depending on whether they are on call outside normal working hours); and
  • managers of public houses.

Employers have until 31 March to work with employees and amend contracts as necessary. Employers can speak to their Customer Compliance Managers for support, if appropriate, or HMRC’s Employer Helpline.

More information: