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Common examples of benefits that may fall into this section of a P11D can include the cost of the accommodation, as well as other costs such as, but not limited to, council tax, furniture and repairs, maintenance or decoration.
There are two charges: the Basic Charge and the Additional Charge. The Basic Charge is the greater of the gross rateable value of the property or the rent paid by the employer minus any rent paid by the employee.
The Additional Charge applies to properties valued at more than £75k, including the cost of any improvements. If the employer has owned or had an interest in the property in the past six years, use the actual cost as opposed to market value. The charge is applicable for any property value exceeding £75k and is subject to the current interest rate.
Accommodation may be exempt from being reported as a benefit in some situations. Common examples include cases where accommodation must be provided for the employee to perform their duties better, such as a farm worker being provided with accommodation on the farm.
Another typical example of situations where accommodation becomes exempt from being reported could be where the employer is usually expected to provide accommodation based on the nature of the role, such as a clergy member. Another consideration when looking at reasons for accommodation being exempt would be if the accommodation is provided due to a threat to that employee's security, typically for consideration for high-profile roles such as the Prime Minister.
For more information on section D, including other exemptions from reporting and more detail on how to work out the property's value, please visit this website.
Please note – This guideline is not exhaustive, and it does not cover every eventuality. Its main focus is on the most typical scenarios that usually happen in reality. It's important to be aware of other possibilities as well. If you need more detailed information, please refer to the HMRC website. Always consult a tax advisor if you have any doubts or queries.