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:

> Introduction

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

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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