Most employers pay for the business relocation cost of their employees. The first £8,000 of the reimbursed qualifying removal cost is exempt from tax, subject to certain conditions. This document covers these in detail, along with the temporary living accommodation; cars and vans; domestic goods replacement; management fees; bridging loans; sale of property to employer; and reporting requirements.
Points discussed within this guidance note:
Relocation expenses are often paid by an employer when an employee is moved to a new location or an employer takes on a new employee who has to relocate. This note discusses the relocation expenses tax, qualifiying relocation expenses and the exemptions which apply.
Relocation costs become tax deductible if they are paid by the employer and up to a limit of £8,000, subject to certain qualifying criteria. In order to claim tax relief the employee must actually change main residence to a new residence within reasonable distance of the new workplace, and do this within a reasonable time frame. This note goes into more detail as to each of these qualifying details.
> The employee must change his main residence
> The new residence must be within a reasonable travelling distance
> The expenditure must be incurred within a certain period of time
> The £8,000 limit
> Qualifying costs
> Disposal costs
> Acquisition costs
> Removal costs
> Travel and subsistence costs
> Temporary living accommodation
> Cars and vans
> Replacement domestic goods
> Management fees
> Bridging loans
> Sale of property to employer
> Reporting requirements
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