Utilities, council tax and other bills in accommodation

Produced by a Tolley Employment Tax expert

Employment Tax

Guidance

The payment of an employee’s council tax or utility or other bills is usually linked to the provision of living accommodation to the employee.

Whether or not the payment of council tax or utility bills is treated as a taxable benefit depends on whether the reason for the provision makes it an exempt benefit under specific legislation.

Payments in respect of gas and electricity made by an employer in relation to employer-provided accommodation are always taxable. However, how and why the benefit is provided to the employee determines both the value of the benefit and reporting requirements.

Council tax and utility bills ― exemptions

Whether or not the payment of council tax or utility bills on behalf of the employee constitutes a taxable benefit depends on why the amounts have been paid.

If the payment of council tax does not fall into one of the exemptions below then the full amount is taxable. The section on ‘reporting requirements’ below sets out how it should be reported and taxed.

Exemptions applicable to council tax or

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Utilities, council tax and other bills in accommodation

Utilities, council tax and other bills in accommodation