Income Tax (Earnings and Pensions) Act 2003 section 315

Limited exemption for expenses connected with certain living accommodation

Section 315 provides a partial tax exemption for expenses connected with job-related living accommodation, limiting the amount that can be taxed on household running costs to 10% of the employee's net earnings (adjusted for the period involved), less any amounts the employee has reimbursed.

• The exemption applies only where the accommodation qualifies as necessary for duties, provided for better performance of duties, or provided due to a security threat
• Covered expenses include heating, lighting, cleaning, repairs, maintenance, decoration, and the provision of normal domestic furniture and equipment
• The taxable amount is capped at 10% of net earnings from the employment, proportionally reduced if accommodation is not provided for the full year, and reduced by any amounts the employee reimburses
• Net earnings are calculated by taking total employment earnings (including any associated company earnings), excluding the expenses in question, and deducting allowable items such as mileage allowance relief, pension contributions, and capital allowances