Glossary · UK
What is Relocation Relief?
A tax exemption letting an employer reimburse up to GBP 8,000 of an employee's qualifying job-relocation costs free of income tax and National Insurance.
Full Definition
Relocation relief is the income tax and National Insurance exemption that applies when an employer helps an employee with the costs of moving home because of a job. Up to GBP 8,000 of qualifying relocation expenses and benefits can be provided tax-free; anything above that limit is taxable and reportable, usually through a PAYE Settlement Agreement or on form P11D. To qualify, the move must be required because the employee is starting a new job, changing duties or changing workplace, the new home must be within reasonable daily travelling distance of the new workplace while the old one is not, and the costs must be incurred broadly by the end of the tax year after the year of the move. Eligible items include estate agent and legal fees, stamp duty, removal costs and certain bridging-loan expenses; relocation does not extend to mortgage subsidies generally. The relief reduces the cost of recruiting and moving staff and is a common element of job-offer negotiations.