§ Mr. Tugendhatasked the Chancellor of the Exchequer whether the revaluation of properties for rating purposes will affect the amount of income tax payable by individuals whose employers provide them with living accommodation at less than the normal rent.
§ Mr. Patrick JenkinFor tax purposes, there are two groups of employees who live in accommodation provided by their employers at a rent less than its annual value. First, there are those who are required to live in the accommodation for the proper performance of their duties. This group includes such people as park keepers, caretakers, lock and level crossing keepers. They rank as representative occupiers and are not taxable on the benefit from the low rent. Secondly, there are those who rank as beneficial occupiers and under Section 185 of the Taxes Act are taxable on the difference between the annual value of the premises and the rent paid, if any.
The latter group includes substantial numbers of workpeople and junior managerial employees in the nationalised and other industries as well as a number of 252W policemen and others whose employers provide low-rent accommodation as part of their normal terms and conditions of service.
The rules for determining both annual value for tax purposes and, in Great Britain, gross value for rating purposes, follow the same principles. An increase in the gross value for rating of beneficially-occupied premises would therefore, unless his rent is raised, normally lead to a corresponding increase in the employee's taxable benefit, and so in his PAYE deductions.
The Inland Revenue has, with my approval, decided that the rating revaluations which are effective in Scotland from Whitsunday 1971 and in England and Wales from April 1973 will be taken into account in relation to employees' taxable benefits from the occupation of employer —provided accommodation as from 6th April 1974.
The Government have under review the whole question of the taxation of benefits in kind.