Pub host faces live-in benefits tax bill

A lessee has been hit with a £7,641 tax bill for live-in benefits at his pub.

HM Revenue & Customs is chasing Tim Boddy for the amount, which dates back six years and is based on the perceived benefits of living at Greene King's Waggon & Horses in Maidenhead, Berkshire.

Boddy has contacted his local MP, Home Secretary Theresa May, who is looking into the matter with the Treasury.

The case acts as a warning to hosts to make sure they are paying the right amount so that they don't receive a similar bombshell bill.

The live-in benefit figure is supposed to be based on the benefits of heating, lighting and water.

Accountant David Jones of Wetherby-based David R Jones said there is a "grey area" over whether he should be charged for the benefit of not paying residential rent.

The rent aspect should not apply to Boddy as he has been a director of the company that runs the pub for six years. Technically this makes him a company employee, rather than a self-employed licensee, so he should pay tax on the same benefits as a live-in chef, for example.

Jones said becoming a director of your own company "makes a big difference" when it comes to live-in benefits.

"A company director should pay less tax. They don't pay tax in rental value, but must pay a statutory adjustment for electricity, gas and water," he said.

Jones added: "If the right value of tax is not paid, the Inland Revenue can declare the tax late and charge interest. It can quite often double the amount to pay."

Boddy, who has so far paid £1,151 of the tax bill, said: "I think there will be a lot of pubs in this situation."