Ifac reminds Roscommon farmers about tax implications of ‘live-in roles’

Agribusiness specialist, ifac, is this week reminding Roscommon farmers of the tax implications of providing free or subsidised accommodation to their farm employees.

In the first quarter of 2022, the national average monthly rents in Ireland were more than €1,500. Across the country, high rents along with a shortage of rental properties are making it increasingly difficult for employees to find accommodation.

Concerning live-in roles, Declan McEvoy, Head of Tax at ifac, said: “High rents and a housing shortage mean that farmers who can provide free or subsidised accommodation enjoy an advantage in the current market when it comes to attracting and retaining agricultural employees.

“To find out more about how your business could benefit contact your local ifac office or visit ifac.ie”.

Ifac has said it’s important to understand benefit in kind implications when considering offering free or subsidised accommodation.

Under Revenue rules, BIK on employee accommodation is calculated based on the annual market value of the rent plus any related expenses paid by the employer (such as light and heat). While the employee is liable for PAYE, PRSI and USC on the benefit received, access to accommodation is very attractive in the current market and can compensate for lower wages in certain roles.

The firm says it’s also important to be aware that for certain roles, accommodation provided by an employer may be exempt from BIK.

Where an employee is required to live in accommodation on their employer’s premises to perform their duties, the provision of free accommodation may be exempt from BIK. Revenue guidance states that this requirement is usually met where: The employee is required to be on call outside normal hours; The employee is actually frequently called out; or the employer provided the accommodation so that the employee could access work quickly.

Tax-free benefits that can be provided to employees include: Bicycles and safety equipment; Certain course and exam fees; Employer pension contributions to Revenue-approved schemes; Small benefits worth €500 or less that are not in cash form and are given to the employee once a year.