Is living accommodation a taxable benefit?

Historically, living accommodation provided to employees as part of their employment is deemed to be a taxable benefit in kind (BIK), unless the living accommodation falls within HMRC’s exemptions.

Who qualifies for Gehs?

Q: Who qualifies to enrol with the GEHS? A: All persons employed in the public service in National and Provincial Departments. Q: What are the requirements to enrol with GEHS for rural land? A: Employees residing on communal land with valid permission to occupy, enrol with the GEHS like all other employees.

How is housing perk calculated?

For tax purposes, the accommodation provided by the company is treated as a ‘perquisite’ in the hands of employee and is considered to be a part of her taxable salary. The value of such accommodation is calculated as 15% of the salary or actual rent paid by the employer, whichever is lower.

The provision of living accommodation for an employee and/or members of the employee’s family or household gives rise to a taxable benefit unless the accommodation in question is exempt. Where provision of the accommodation is not within the scope of the exemption, a tax liability arises.

How do you treat rent free accommodation?

Under the Income Tax Act, rent-free accommodation is treated as a perquisite or non-cash component of salary granted by the employer to an employee. Hence, Income Tax is applicable on rent-free accommodation received by an employee, including the Key Managerial Personnel of a company.

Can a company provide living accommodation for an employee?

Where living accommodation is provided for an employee or for members of their family or household by the employer it’s deemed to have been provided by reason of that employment. There are 2 exceptions to this.

Who is liable for tax on company provided living accommodation?

Subject to paragraphs 21.2 and 21.3 below, where an employee is provided with living accommodation by their employer (or by another person where the provision is by reason of the employment) the employee is liable to tax on the value of the accommodation provided.

Is the tax system fair for employer provided living accommodation?

The government believes that the tax system should be fair, easy to understand (for both employers and employees) and simple to administer, but recognises that the complexity within the current rules means that this may not be the case for employer provided accommodation.

Can a living accommodation be provided to more than one director?

Where a property consisting of living accommodation is provided to 2 or more directors or employees in the same period, the cash equivalent of the living accommodation to each director or employee will be reduced.