Providing accommodation to workers as part of their remuneration package is treated as taxable income for the employee. Accordingly, Inland Revenue have stated the value of that rent must be at current market value.

In the event of a review or audit, Inland Revenue will check to see that you have followed, and documented, a reasonable process for obtaining the market value for rent in the area of the accommodation you supply.

This market value rent is included in the taxable income of the employee and PAYE must be paid on it.  It is also taken into account for Child Support, Working For Families Tax Credits and Student Loans purposes.

The factors to consider when obtaining a market value rent include location, size of the accommodation, number of bedrooms, parking availability, condition of the accommodation and any restrictions such as pets, smoking, access, etc.

The methods used to obtain the market value may include a valuation from a registered valuer, an estimate from a real estate agent or property manager, searching for rental property ads on websites, or another reasonable basis.

In all cases, it is necessary to document the basis chosen.  This may mean obtaining written estimates or printing comparable internet listings.

It is suggested that the value of the accommodation should be reviewed at least every three years.

If you have any concerns about obtaining a reasonable market value, contact one of our friendly advisers to discuss your options.


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