Living accommodation

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tinajanine65
tinajanine65 Registered Posts: 21 New contributor 🐸
in General accounting discussion
Hi everone
I have a publican who has asked if it would be more cost effective to rent a house in close proximity to his pub and reduce the employees wages to cover rent costs. He is hoping to save money on his NI payments, however would it be a benefit in kind and would it save him money in the long run?

I have checked on the Revenue website and feel P11D's would be the case, however if anyone could offer me more guidance on this subject I would appreciate your thoughts.

Thanks

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  • jamesm96
    jamesm96 Registered Posts: 523
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    Is the business Ltd? And where is he living (i.e. how much is he paying on, presumably, rent?) at the moment?
  • tinajanine65
    tinajanine65 Registered Posts: 21 New contributor 🐸
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    No its not a Limited company. He lives above the pub, but he was thinking that it would be beneficial to him to have his employees in close proximity to the pub, reduce their wages to cover accommodation costs hence reducing the employers Tax/NI liabilities.
  • jamesm96
    jamesm96 Registered Posts: 523
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    tinajanine65 wrote: »
    No its not a Limited company. He lives above the pub, but he was thinking that it would be beneficial to him to have his employees in close proximity to the pub, reduce their wages to cover accommodation costs hence reducing the employers Tax/NI liabilities.

    Oh I see. Sorry, I'd misunderstood who the accommodation was for.

    In which case yes it's a taxable benefit for his employees (because they don't have to live their to fulfil their duties) in which case he still has to pay Class 1a NICs anyway, as well as then having the added hasle of having to do P11Ds every year and also administer the renting of the property (and, presumably, becoming liable for any reparations due too).

    Doesn't sound like a great idea to me.

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