Taxation and repayment
The employee is responsible for any statutory income tax and national insurance liability.
As the relocation is job-related, the first £8,000 is exempt from tax provided that certain statutory conditions are met including that the new property is the employee's sole or main residence.
Any exceptional circumstances where we give payments above £8,000 are classed as a taxable benefit. The employee must report this to HMRC.
Use the form P11D by 6 July following the end of the tax year (5 April) in which we reimbursed the expense or provided the benefit.
To qualify for the tax and NIC exemption against the £8,000 limit, the employee must have to move home to:
- take up a new role with us
- or, continue employment with us but at a new location
They must also:
- have been living outside a reasonable daily travelling distance of their new workplace
- move to within a reasonable daily travelling distance of their new workplace
- agree with us that we will reimburse their relocation expenses
Repayment of relocation assistance
Employees must agree to repay some, or all, of the amount we give if:
- their employment terminates within two years from the date of payment of the relocation expenses
- or, they move out of the residential area agreed whilst still in the post, within two years of taking up the post
The amount repayable is reduced by 1/24th for each completed month up to two years after the date they started.
Repayment is not required when termination of employment is a result of redundancy, ill-health or disability.
If the employee does not relocate, we will ask them to repay all or part of any relocation assistance given.