EIM03129 | Removal or transfer costs: relocation companies: management fees: example
From HM Revenue & Customs · Employment Income Manual
Part 4 Chapter 7 ITEPA 2003
A relocation package provides an all-inclusive service with a fixed management fee of £1,500.
| Service provided | Amount |
|---|---|
| Legal fees | £1,500 |
| Estate agent’s fees | £1,500 |
| Removal costs | £500 |
| Loan interest | £2,500 |
| Counselling | £1,500 |
| Total | £7,500 |
Only £6,000 is exempt as the costs of counselling do not qualify for exemption.
The proportion of the management fee that qualifies for exemption is (£1,500 ÷ £7,500) × £6,000 = £1,200.
The amount chargeable to tax will be:
| Cost of services provided | £7,500 | |
|---|---|---|
| Management fees | £1,500 | |
| £9,000 | ||
| Less exempt expenses and benefits | £6,000 | |
| and exempt management fees | £1,200 | £7,200 |
| Taxable expenses and benefits | £1,800 |