24 Month Tax Rules on Temporary Workplace

Q. We have an employee currently seconded from our EU-based parent company. Initially, she was due to be with us for 18 months, of which twelve have already passed. We are paying for a flat for her on the basis that it is a temporary workplace, so not taxable on her. We are considering extending her stay for a further 18 months, as she has had a very positive impact. Are we able to continue paying the rent on the flat tax free until two years has elapsed?

 

A: A workplace is only “temporary” as far as the expectation is that it will the workplace for less than two years. If you decide that you are going to extend the secondment beyond two years, the trigger date for the rent payments becoming a taxable benefit is the date that decision is made, because it can no longer be said that the expectation is that your site will be the workplace for less than two years.

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