Club Steward

Accomodation provided for club stewards

  1. Is a good idea to charge the steward rent for the occupation of a house or flat?

Our advice to all clubs is that charging rent to an employee should be avoided as it not only creates a tenancy situation but a tax liability for both the club and the employee. The rent charge may also lower the employee’s pay for National Minimum Wage (NMW) purposes exposing the club to an unintentional breach of the NMW rules and penalties.


The employees tax position is that any rent will be paid from their post-tax income. For example, taking into account income tax of 20% and employee’s national insurance of 12% the employee would have to earn a gross salary of £8,824 to pay an annual rent of £6,000 or £500 per month.  Once the club receives the rent it will be treated as non-mutual income and subject to corporation tax at 19% resulting in a tax liability for the club of £1,140. In addition, employer national insurance currently at 13.8% will be payable on the employee’s gross salary resulting in a further charge of £1,217.

Adding together the corporation tax, income tax and employee and employer national insurance contributions the total tax liability is £5,181, whereas no liability to tax exists when the accommodation is provided rent free.

The provision of rent free accommodation required for the ‘better performance of the employee’s duties’ is one of the few and most valuable tax free benefits that remain. If savings are being sought, the most tax efficient method is a reduction in the employee’s gross wage or a salary sacrifice.

The only exception is in respect of the supply of free heating, lighting and other services, these are regarded by HMRC as a taxable benefit.  To overcome this the club should either charge the employee a ‘contribution towards accommodation expenses’ or include the payments in the annual P11d return to HMRC.

National Minimum Wage

The NMW legislation is complex.  The Government has established an ‘accommodation offset’, currently £63.70 per week, this offset effects NMW pay depending on how much an employer charges for accommodation:

  • Where a club provides accommodation and charges rent the employee’s pay is reduced by the amount charged above the accommodation offset, the higher the excess above the offset the lower the pay for NMW purposes.


  • Where the amount charged for rent is at or below the offset rate there is no effect on NMW pay.
  • Where accommodation is free the offset rate is added to the employee’s pay for NMW purposes.

There are a few additional points to consider:

  • It doesn’t matter if the rent is taken from an employee’s pay beforehand or if the employee pays the cost after they receive their wages. Both are treated the same for NMW purposes.
  • Use of the accommodation does not have to be mandatory. When the accommodation provided is optional the offset and NMW calculations apply when the employee uses it.
  • If the rent charged is below the offset rate the balance is not added for NMW pay, this only happens when the accommodation is provided for free.
  • Rent, gas, electric and water charges all count as accommodation charges. The best option for a club is if these items were separately metered and paid for by the employee.

To summarise the impact of the legislation on the NMW pay calculation: where rent is charged the excess over the offset amount is deducted from pay; where no rent is charged, the offset is added to pay; where the charge is below the offset amount (including electric and gas) there is no effect on NMW pay.


When dealing with employees who benefit from free accommodation, it is important that any form of tenancy is avoided, consequently no money should either be received or deducted that could be viewed as being rent. The club should ensure that all employees who benefit from living accommodation do so as ‘service occupiers. An employee, who occupies the club’s property for the better performance of his or her duties, is contractually required to do so and pays no rent, is a service occupier and has no security of tenure. Such occupation ceases on termination of employment even if the termination is subsequently deemed to be unfair.

With the tax advantages and so many NMW and tenancy complexities, it may be advantageous not to charge rent to an employee for the use of the club’s accommodation but to lower the employees pay by an equivalent amount.