Agricultural workers who are living in a home that’s provided as part of their job may soon be paying income tax on its rental value. The Office of Tax Simplification have raised proposals to the government and are currently waiting to see if they get accepted.
While the government still attempts to find new ways to claw back tax without raising the general income tax rates, this comes as a stark warning to all concerned.
Company car drivers have appreciated for some time the cost of having a car provided to them, and while many farmers may have assumed that the provision of homes for their worker would go unnoticed, it seems it may not be the case for much longer.
There will still be exceptions such as when an employee has to live on the property to protect building, assets or even people. Also if the employee is required to work very long hours, or the residence is a result of regulatory requirements this will be an exception.
However, while these cases may be argued, you can be sure that there will be a strict assessment. For example, workers on arable holdings may have more difficulty proving their presence is essential as those working with livestock.
Where tax exemption is agreed, the news that additional services like heat, light and repairs will also be exempt is welcome indeed.
While at this stage it is only a proposal, it is likely to become a reality. If you’re a farmer who this might impact, contact us to discuss the options available to you.
Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.
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