Income Tax (Earnings and Pensions) Act 2003 section 316

Accommodation, supplies and services used in employment duties

Section 316 provides an exemption from income tax on benefits in kind where an employer provides accommodation, supplies or services that are used by the employee mainly for performing their job duties, subject to two conditions being met.

• No income tax charge arises on accommodation, supplies or services provided to an employee for use in performing their duties, provided that any private use by the employee or their family is not significant (Condition A) and, where the provision is made away from the employer's premises, it is solely to enable the employee to do their job and is not an excluded benefit (Condition B).
• "Private use" covers both use that is entirely unrelated to the job and use that simultaneously serves both work and non-work purposes — even dual-purpose use counts as private.
• Excluded benefits — which cannot qualify for the exemption — include motor vehicles, boats, aircraft, extensions or alterations to living accommodation, and construction or alteration of buildings on adjacent land, unless Treasury regulations provide otherwise.
• The Treasury may make regulations to redefine what counts as an excluded benefit, including setting conditions about the terms on which, and the persons to whom, a benefit is provided.