§ Mr. Clifton-BrownTo ask the Secretary of State for Social Security what considerations underlie the different treatment of an employer's payment of an employee's council tax liability, paid under a contract of employment, for national insurance contributions and income tax; and if he will make a statement.
§ Mr. BurtGenerally the position is that such an employee would normally be liable to both national insurance contributions and income tax. However, certain employees who are living in accommodation provided by the employer are not charged income tax on the benefit of that accommodation under the provisions of section 145(4) of the Taxes Act 1988. Broadly, this is where the accommodation is necessary for their job. The payment of the council tax on such accommodation by the employers will not give rise to an income tax charge on these employees.
There are no parallel provisions in social security legislation and consequently national insurance contributions may be due. However, my right hon. Friend, the Secretary of State is currently considering whether this difference is suitable for alignment under the current deregulation initiative.