News on 22 November 2000

The Inland Revenue has issued new guidance covering income tax and national insurance contributions on relocation packages. A new edition of booklet IR134 explains the position for tax and National Insurance contributions where an employee gets help from his or her employer towards the cost of moving house.

Where an employer helps towards the cost of relocating an employee, the first £8,000 of qualifying removal expenses and benefits is exempt from tax. The exemption also applies, from April this year, to Class 1A National Insurance contributions on taxable benefits and expenses.

Copies of booklet IR134, which explains how the exemption works and includes examples, is available, free of charge, from Inland Revenue Enquiry Centres or Tax Offices, or from the Inland Revenue Visitors' Information Centre, SW Bush House, Strand, London WC2B 4RD.

The new edition of the booklet will also be available on the Inland Revenue’s website at www.inlandrevenue.gov.uk/pdfs/ir134.htm