P11d Qualifying Relocation Expenses Section J

P11d Qualifying Relocation Expenses Section J covers costs exceeding £8,000 of all non-qualifying relocation costs.

P11d Qualifying Relocation Expenses Section J

P11d Relocation Expenses

An employer can contribute up to £8,000 towards qualifying moving expenses and benefits for an employee tax-free.

Anything above this limit becomes taxable and needs to be included on a P11d form.

P11d relocation expenses includes costs such as:

  • those involved with buying or selling a home such as legal or agents fees;
  • moving costs;
  • buying certain things for a 
new home;
  • bridging loans (see below);

These relocation expenses are only qualifying costs, to be included in the £8,000 tax free amount, when:

  • a new employee is moving area to start a job with you;
  • an existing employee is changing their place of work within your organisation;
  • the costs are paid before the end of the tax year after the one in which the move took place;
  • the employee’s new home is reasonably close to the workplace and their old home isn’t.

Bridging loans

For a bridging loan to count as a P11d qualifying expense:

  • your employee (or members of their family) must sell their old home and buy a new one;
  • it must be needed to bridge the gap between buying the new house and getting the money from their sale of the old one;
  • it must be used only to buy the new house or pay off loans relating to the old home;
  • it can’t be for more than the market value of the old home at the time the new home is bought.

How to Calculate P11d Qualifying Relocation Expenses

HMRC provides a useful worksheet on which to work out the P11d value of relocation expenses.

Non Qualifying Expenses

Non-qualifying expenses are ones which do not meet the criteria above but have been covered by the employer. 

These costs need to be reported on a P11d form but disclosed in section N.

Anita Forrest
About Anita Forrest

Anita Forrest is a Chartered Accountant, spreadsheet geek, money nerd and creator of www.goselfemployed.co - the UK small business finance blog for the self-employed community. Here she shares simple, straight-forward guides to make self-employment topics like taxes, bookkeeping and banking easy to understand.