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Holiday homes: HMRC invite Class 1A NIC repayment claims

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HMRC have invited companies to reclaim Class 1A national insurance contributions paid on the benefit of living accommodation that was treated as earnings for income tax purposes until an exemption was enacted in 2008.

ITEPA 2003 ss 100A and 100B, introduced by FA 2008 and deemed always to have had effect, provide that the tax charge does not apply to accommodation outside the UK that is provided by a company for a director or other officer of the company, or a member of his or her family or household, where certain conditions are met.

For example, the company's main or only asset must be a ‘relevant interest’ in the property.

The change took effect in July 2008 and HMRC invited claims to repayment of income tax but not Class 1A NICs.

The Social Security (Contributions) (Amendment No. 3) Regulations, SI 2011/797, align the NIC position with the tax position, HMRC said.

HMRC have published guidance for companies entitled to a refund.