Tax changes possible on housing for UK farm workers

Tax charges on living accommodation for farm and estate workers may be changing soon and could hit workers provided with housing

A rural farming scene
A rural farming scene

Tax charges on living accommodation for farm and estate workers may be changing soon.

The Office of Tax Simplification (OTS), in its interim report on employee benefits and expenses last year, suggested changes to tax arrangements where accommodation is provided to employees.

Catherine Desmond, partner at accountants Saffery Champness, and a member of the firm’s landed estates and rural business group, believes this will inevitably impact on farms and estates where certain jobs have traditionally come with accommodation provided.

She said: “The OTS has stressed that there is only no tax charge on living accommodation provided to an employee if the provision of accommodation is necessary for the proper performance of that employee’s duties and, under any future dispensation, that test would have to be properly met.

“The OTS perspective is that times have changed, people now have greater mobility and often would prefer to control their own accommodation requirements by either renting or purchase rather than to depend on tied accommodation, and land-based employees are far fewer in number.”

The report also looks at whether the exemption should be applicable in cases where it is customary for the employer to provide living accommodation for employees. This test currently focuses on whether the accommodation is provided for the better performance of duties.

Ms Desmond added: “The OTS report singles out the rural sector since this recommendation will cover many who could collectively be categorised as estate workers, whether gamekeepers, stalkers, shepherds or other farm workers.


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