P11D Guide -
Section J – Qualifying Relocation Expenses

Section J – Qualifying Relocation Expenses

The first £8,000 of qualifying relocation expenses associated with an employee required to change their main residence for valid work reasons are exempt from tax. Valid reasons include: -

  1. Starting a new employment
  2. Change of the duties of employment
  3. Change of the place (or normal place) where their duties of employment are performed

A qualifying relocation expense has to fit into one of the following broad categories: -.

  1. Disposal or intended disposal of old residence
  2. Acquisition or intended acquisition of new residence
  3. Transporting belongings
  4. Travelling and subsistence
  5. Domestic goods for the new residence – only fixed items that would be unreasonable to expect your employee to take with them from their old residence.
  6. Bridging loans

Anything that does not fit into one the above criteria is a non-qualifying relocation expense and should be entered in Section N.

Employees have until the end of the following tax year in which the relocation commenced to fully utilise the £8,000 exemption. Relocation expenses that would have been qualifying but that were paid late should be entered in Section M.

Finally, the £8,000 exemption is related to each relocation and not to the tax year.