Commentary on Sections Example 3 Ne = £5,000; Da = 183; De = 183; Smg = 0 Section 364: Deductions where living accommodation provided
1584.This section applies where the benefit provided is living accommodation. A deduction may be allowed where the earnings include an amount treated as earnings under Chapter 5 of Part 3. If the employee would have been allowed a deduction under Chapter 2 or Chapter 5 of this Part if he had paid for the accommodation, a deduction is allowed under this section. It derives from section 145(3) and 146(9) of ICTA.
1585.A limit is placed on the deduction to be made. The deduction will be calculated on the basis that the amount paid by the employee for the accommodation is equal to the amount treated as earnings in respect of that accommodation.
1586.Subsection (1) sets out the conditions which must apply if a deduction from earnings is to be allowed.
1587.Subsection (2) quantifies the amount of the deduction.