Not a requirement

Relief for accommodation allowances

The taxpayers were members of a mountain maritime and coastal rescue team. Their employer paid them an accommodation allowance of £10 000 each. The taxpayers claimed relief for the sums under ITEPA 2003 s 336 on the ground that their work required them to live within 15 minutes’ drive of their base. HMRC accepted that each taxpayer incurred living costs but not that they were ‘wholly exclusively and necessarily in the performance of the employment’. It said the housing had a dual purpose and that the expense put the employees in a position to carry out their duties of employment but did not cover the actual performance of those duties.

The First-tier Tribunal concluded first that the accommodation allowance should be regarded as earnings under s 62. But the tribunal decided it was not allowable under s 336. There was no express term...