Income Tax (Earnings and Pensions) Act 2003 section 102

Benefit of living accommodation treated as earnings

Section 102 establishes that the benefit of employer-provided living accommodation is treated as taxable earnings of the employee.

• Where an employer provides living accommodation to an employee during all or part of a tax year, the cash equivalent of that benefit is treated as earnings from the employment for that year.
• The period during which accommodation is provided and the employee holds the employment is known as the "taxable period," and this defines the window over which the benefit is measured.
• If the accommodation is provided under optional remuneration arrangements (such as salary sacrifice), the normal cash equivalent rule is replaced by a "relevant amount" which is treated as earnings instead.
• The methods for calculating the cash equivalent and the relevant amount are set out in sections 103 and 103A respectively.