The Office of Tax Simplification (OTS), in its interim report on Employee Benefits and Expenses last year suggested changes to tax arrangements where accommodation is provided to employees. Catherine Desmond, Partner, Saffery Champness, and a member of the firm’s Landed Estates and Rural Business Group, said this will inevitably impact on farms and estates where certain jobs have traditionally come with accommodation provided. She said: "The OTS has stressed that there is only no tax charge on living accommodation provided to an employee if the provision of accommodation is necessary for the proper performance of that employee’s duties and, under any future dispensation, that test would have to be properly met. "The OTS perspective is that times have changed, people now have greater mobility and often would prefer to control their own accommodation requirements by either renting or purchase rather than to depend on tied accommodation, and land-based employees are far fewer in number." The report also looks at whether the exemption should be applicable in cases where it is customary for the employer to provide living accommodation for employees. This test currently focuses on whether the accommodation is provided for the better performance of duties, which is more relaxed in terms of criteria than being necessary as is proposed. Catherine Desmond says: The OTS report singles out the rural sector since this recommendation will cover many who could collectively be categorised as estate workers, whether gamekeepers, stalkers, shepherds or other farm workers. The last review of this type was carried out in 1977, and much has changed since that time, not least property values which have increased significantly in tandem with rents, thereby making the value of the benefit considerably greater. "We anticipate that changes in relation to tax charges on living accommodation could be included in the 2014 Budget as a quick win for tax simplification, and it would be sensible for farm and estate owners who provide such benefits to review their own arrangements," said Desmond."We suggest taking professional advice before having appropriate discussions with those employees who may be affected by possible changes to their benefits in future."