Scott & Wilkinson on Payment of Relocation Costs.
Whether a director or an employee, if you are moving to take up a new job or because the location of your work is changing, up to £8,000 of your relocation costs can be paid by the business and be tax and NI free. This exemption can extend to a low or even interest-free loan from your company.
Now this all sounds like great news, but it’s important to know what the conditions are for this exemption and how long it can apply.
In order to qualify, the move must be wholly or mainly to enable you to live within a reasonable travelling distance of your place of work. A move to be closer to your existing workplace would not qualify, there must be a new role involved, or your company must be relocating. As for ‘a reasonable travelling distance’, there is no set rule, but common sense must be applied.
If a loan is involved, for instance a bridging loan, it must be made on or before 5 April following the tax year in which you relocated. It is also important to note that the loan is only exempt for a certain amount of time and it is best to discuss this with your accountant.
For help with this and any tax or NI related queries, please contact us on 01524 67111 and a member of our specialist team will be happy to assist.
Author: Stuart Hinnigan FCA CTA
Stuart’s career in accountancy began when he joined Preston based Moore and Smalley in 1994 following his graduation from Lancaster University. He qualified as a Chartered Accountant in 1997 and then chose to specialise in...
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