Income Tax (Earnings and Pensions) Act 2003 section 98

Accommodation provided by local authority

Section 98 provides an exemption from the tax charge on living accommodation benefits where the accommodation is provided by a local authority employer on standard terms.

• This exemption applies only where the employer is a local authority
• The living accommodation must be provided directly by the local authority to its employee
• The terms of the accommodation must be no more favourable than those offered to non-employees in similar circumstances
• If all conditions are met, the accommodation benefit is not treated as taxable earnings under the optional remuneration arrangement rules