EIM11339 - Living accommodation exemption: withdrawal of extra statutory concession: representative occupiers

The current tax treatment of individuals provided with living accommodation by their employers or by reason of their employment as “representative occupiers” has been identified as an extra statutory concession (ESC).

The concession for representative occupiers relates to posts which existed before 6 April 1977 (EIM11336).

HMRC is responsible for the collection and management of taxes. It may use concessionary treatment which effectively provides a reduced tax liability if the concession is to deal with minor or transitory anomalies and meeting hardship at the margins.

Following a decision in the Court of Appeal (Wilkinson), HMRC undertook to review the position of all published ESCs and those not published as ESCs but identified as such. The ESC on representative occupiers does not meet the conditions set out for the collection and management of taxes and should either be legislated for or withdrawn.

The government is not going to legislate this ESC and it will be withdrawn from 6 April 2021. Announcing this policy change now should allow both employers and employees affected by the ESC’s pending withdrawal to make the necessary contractual arrangements. It will also give time for employers to consult with HMRC on an employee’s possible entitlement to existing statutory exemptions where they may be affected by this change.

Any queries should be addressed to your own HMRC Customer Compliance Manager if appropriate, or the Employer Helpline.