Staff relocation costs

Produced by Tolley in association with

Employment Tax

Guidance

Introduction

A large number of employers pay for the cost of relocation of their employees. Particularly this happens when the employer moves an employee from one location to another in order to perform his duties in that new location or where an employer takes on a new employee who has to relocate to take up his duties.

There is a broad-ranging exemption in place. However it only applies to certain types of expenditure in certain circumstances and is subject to an overall cap.

The legislation for the exemption is at ITEPA 2003, s 271 onwards. HMRC’s guidance is at EIM03100 onwards.

Relocation

The exemption from tax applies to the first £8,000 of removal expenses where the reason for the relocation is that the employee is changing employer, taking up a new role within an organisation or changing the place where he is normally expected to carry out his duties. The exemption only applies where either the employer, or a third party, pays for the removal expenses or reimburses the costs borne by the employee.

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Philip Rutherford

Senior Tax Director at Molson Coors Brewing Company

Phil is the Senior Tax Director for Molson Coors' European operations. He has responsibility for both direct and indirect taxes across both EU and non-EU states. Prior to this, Phil was responsible for Molson Coors UK tax affairs covering all major taxes and duties. Phil trained at KPMG LLP, where he worked for 8 years, specialising in tax investigations across both direct and indirect tax.

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