Sometimes employers will pay for their employees living accommodation expenses, including for example their monthly rent bill. This usually forms part of their employment contract and you must make sure that it is reported as a benefit in kind whereby the employee will pay personal tax on the benefit.
If one of your employees or one of their relatives is living in accommodation provided by the company.
Also includes if you as a company covers costs such as:
Council Tax, water and sewerage charges
Furniture, heating, lighting maintenance
What's not included
You don't have to report or pay anything to HMRC on the cost of certain types of accommodation such as:
If it's domestic or personal
If it's provided by a local council
If it's necessary or usually provided for the job
If it's needed for security
Check out the links for further info of each of these exempt situations.
How is it taxed?
How the tax is worked out depends on whether the accommodation cost more than £75,000.
Make sure to check out how to work out how much tax to deduct from your pay at the HMRC guidance here.