The Government will include changes to the tax treatment of employee allowances, reimbursements and employer-provided accommodation in the Taxation (Annual Rates, Employee Allowances, and Remedial Matters) Bill, which will be introduced later this month.
The main proposal that will affect Churches is:
- When an accommodation benefit is taxable, it will generally be valued at its market rental value. However, for reasons of fairness, a specific valuation rule is proposed for ministers of religion, to reflect longstanding past practice. In that case the taxable value will be capped at 10% of the minister’s remuneration, subject to the accommodation being commensurate with the minister’s position and ministry location.