Income Tax (Earnings and Pensions) Act 2003 section 313

Repairs and alterations to living accommodation

Section 313 provides an exemption from income tax on certain repairs, alterations and additions made to living accommodation that is provided to an employee by reason of their employment.

• Where an employer provides living accommodation to an employee, structural alterations, additions and landlord's repairs are exempt from the residual taxable benefits charge
• This prevents a double tax charge, since the cost of structural work may already increase the taxable value of the accommodation under the accommodation benefit rules
• The exemption for repairs is limited to landlord-type repairs (as defined by the Landlord and Tenant Act 1985) and does not extend to tenant's repairs or improvements disguised as repairs
• The exemption only applies where the accommodation itself is taxable as a benefit under the employment-related accommodation rules