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Sorry but this appears to contradict itself. You are saying that the Offset does not affect the Gross Pay for Tax and NIC which, as we have to pay at least the minimum wage, would appear to say that their Gross Pay would still be £9.50 per hour but then you say that we cannot tax it.
Could you just confirm. In the above example, the employee's Payslip should show a Pay Rate of £8.09 and nothing else and that Tax and NI calculations would be based on 43 x £8.09 = £347.87 Gross Pay, which nothing further to report, either by us or the employee, regarding the accommodation provided.
Thanks for your help.
If an employer provides free accommodation to a minimum wage employee, the employee's pay rate can be reduced by the Accommodation Offset to a Total of £8.70 x 7 days = £60.90 per week.
For an employee aged over 23, who works 43 hours per week, this means that their Pay Rate can be reduced as follows:
£9.50 x 43 = £408.50 - £60.90 = £347.60 / 43 = £8.09 and still maintain earnings equivalent to the National Living Wage.
Would the employee's Weekly Tax Liability be based on 43 x £8.09 = £347.87?
Or would it be based on £347.87 + £60.90 (Accommodation Offset)?
If it is the latter, how would this be reflected on the employee's payslip or would a P11d need to be submitted at the end of Tax Year for each affected employee?