Equine Jobs with Accommodation: myths, facts and the law
by Kelly Wallace Horne
The team at The Grooms List by Caroline Carter Recruitment speak to employers and job seekers all the time who are totally clued up about what their entitlements and responsibilities are in relation to horsey job vacancies where accommodation is on offer. When everyone is clued up it is, more often than not, a mutually beneficial arrangement where again, that all important win:win dynamic can make everyone’s life better BUT we do come across even more employers and job seekers who have less of an understanding concerning the legal and tax ins and outs of the matter.
As a Recruitment Agency, we take our responsibilities here very seriously and, if necessary, Caroline “gets involved” and tries to ensure all parties are aware of the consequences of consciously or unconsciously getting it wrong, and will try to steer them to the right specialists. If things do hit the fan, it can be financially catastrophic for employers and can leave employees labouring for years on miserably low wages that amount to little more than “pin money” at best!
The provision of accommodation with an equine job can be a grey area for both employers and employees, with so many varying arrangements from yard to yard and job role to job role. Get it wrong and:
- At the very least an employer struggles to find and keep staff
- The employee loses out on their salary entitlement
- Worst case scenario, the employer and employee find themselves in very hot water
Here I will attempt to put a complex matter into as simple terms as possible, regarding the provision of accommodation with a job, based on situations regularly seen within the equine industry. By outlining:
- The myths
- The facts
- The law
This article aims to provide basic guidelines but is in no way exhaustive – if you are in doubt about the provision of accommodation with your job it is strongly advisable that take a look at https://www.gov.uk/national-minimum-wage-accommodation or that you speak to the Equestrian Employers Association (EEA), your accountant, an employment or tax lawyer or, at the very last resort, HMRC or ACAS. Once you have clarity we would generally recommend in the first instance you feedback the details to your employer or employee and give them an opportunity to remedy the situation. If you are an employee, maybe encourage your boss to take proper advise going forward so that they can better safeguard themselves on all such matters .
The consequences of not playing it straight
It may seem a huge faff working out the National Minimum/Living Wage with Accommodation Offset Rates and other benefits which may be costly to the employer but the bottom line is, it’s the law. Just because the equine industry has functioned for years by offering yard staff “all-in-one” salary packages doesn’t mean it is exempt from these laws today. If you are an employee taking a new job, or an employer taking on a new employee, have a read of our article How to negotiate a salary in the equine industry, and make sure both parties are clear on their obligations and agreements before an employment contract is finalised.
The provision of accommodation with an equine job
“I am providing/receiving accommodation as part of the job so the salary package can merely be topped up with a take-home wage. £200 a week on top of decent accommodation with bills paid and livery for a horse is a good deal.”
It is not possible to discuss equine jobs with accommodation without first touching upon salary additions and bonuses. As we discussed in our article Equine Careers: Taking a Horse and pets to a new job, the equine industry presents a somewhat rare opportunity for employees to bring to and/or keep their pets, including horses, at their place of employment. It seems entirely logical for grooms to be offered a salary package which includes accommodation, livery for a horse (or even two), riding lessons, utility bills paid, WIFI and even SKY/Cable TV. If you were to add up the rental value of the accommodation, the utility bills, the provision of bonuses like WIFI/Sky channels, and the stable space and upkeep of a horse, then factor in an additional £150 a week on top, yes, it might seem like a good salary package – but it isn’t necessarily legal.
The National Minimum Wage is always the starting point when working out wages, regardless of benefits and bonuses that are thrown in, and there are very few circumstances where the National Minimum Wage does not apply. Even if you are providing/receiving a generous overall salary package, the National Minimum Wage still applies. Employers and grooms alike owe it to themselves to ensure they know the score when it comes to salary packages and the law.
The National Minimum Wage refers to all employees 24> years of age.
The National Living Wage refers to employees 25< years of age.
Employers providing accommodation can legally apply ‘Accommodation Offset Rates’ to the National Minimum/Living Wage, but that is all.
It doesn’t matter what the rental value of the property is, how recently it was refurbished, or whether the employee houses a menagerie of animals in there, the law states clearly that employers can only deduct the Accommodation Offset Rate from the National Minimum Wage and National Living Wage. From 1st April 2020, the offset rate is £8.20 a day/£57.40 per week, which applies to every day that free accommodation is provided, not every day the employee works. The NMW rates are reviewed each year by the Low Pay Commission, which makes recommendations for change to the Government. Every year, from 1st April, the National Minimum and Living Wage rises, and the Accommodation Offset Rate rises too.
National Minimum/Living Wage Rates
April 2020 – March 2021
Apprentice: £4.15 per hour
Under 18: £4.55 per hour
18-20: £6.45 per hour
21-24: £8.20 per hour
25 and over: £8.72 per hour
For employers, it’s a criminal offence to not pay someone the National Minimum Wage or National Living Wage. Employers can read more about ensuring they’re staying legal here.
Accommodation Offset Rates
April 2020 – March 2021
£8.20 per day / £57.40 per week
Full details on the provision of accommodation with a job and the Accommodation Offset Rate can be found on the Government website here.
When accommodation is included as part of the salary package
Let’s look at the following job description…
- 6 day week
- free accommodation (suitable for a couple/family, has a garden, underfloor heating, and Sky TV etc)
- bill free – all utility bills are paid
- free livery for own horse
- £375 weekly, gross
First of all, as previously mentioned, the single occupancy, garden, underfloor heating, and Sky TV, the utility bills and livery for the horse are NOT deductible from the National Minimum Wage. In terms of the gross salary, a 6 day week (let’s say it is an 8 hour day/48 hour week) with a gross weekly wage of £375 works out to £7.81 an hour. It’s clear to see that this wage is under the National Minimum Wage for everyone 21 years or older for 2020-2021.
If we apply the 2020-2021 Accommodation Offset Rate of £57.40 a week, from a legal perspective the gross hourly wage is increased to £9.00, which is above all National Minimum and Living Wage rates.
In a nutshell, in order to stay within the law this job is legal providing the employee lives in the accommodation (on-site or off-site) that is provided for free by the employer – but not if the employee pays a fee to their employer for the accommodation, sources and pays for their own accommodation, or “lives out” in their family home!
Charging employees a fee for accommodation
By law, employers can charge employees as much as they like for work-related accommodation, as long as it doesn’t reduce the employees salary below the National Minimum Wage minus the Accommodation Offset Rate. Let’s look at the same job again, but this time the employer pays a higher wage but makes deductions for accommodation…
- 6 day week
- accommodation available (suitable for a couple/family, has a garden, underfloor heating, and Sky TV etc) to include bills
- free livery for own horse
- £425 weekly, gross minus £50 a week towards the accommodation, should you choose to take it
The increase in salary combined with the £50 weekly charge for accommodation presents the same salary package, it’s just that job A offers a salary package including accommodation, whilst Job B gives the full salary and deducts the accommodation fee from the employee’s wages. Both methods are perfectly legal, providing everything is declared to HMRC by both parties. What an employer can’t do is pay the salary of Job A then deduct a fee for the provision of the accommodation as well.
When an employee lives out
If a job is advertised as live in or live out the employee is quite within their rights to choose the live out option, either by sourcing and paying for their own accommodation locally or by living at home with family. In this case, the Accommodation Offset Rate cannot be applied to the National Minimum/Living Wage, even if this means the staff accommodation is sitting empty. As an example, the salary for Job A would be illegal for all employees aged 21 years and older, whereas the salary for Job B would be perfectly legal without the deduction for accommodation. The National Minimum Wage and National Living Wage MUST be adhered to in order to remain legal, so you cannot pay a live out groom the salary that is offset against accommodation for live in employees.
Work in return for accommodation
Occasionally we have employers asking us to advertise a part time, full time, or flexi-hours groom vacancy for them with no wage but purely in return for the provision of accommodation. Seems unlikely, yes, but it does happen!
The myth: the employee’s work will fund the families accommodation whilst their partner works full time locally to provide a salary. If the employee works part time or flexi-hours they can supplement their household income by also working part time elsewhere in their free time. The house has a rental value of say £500-£1200 pcm, so this is an agreeable arrangement for a couple or family, and actually can present a profitable employment opportunity for a part time or flexi-hour groom.
The law: This arrangement may seem agreeable on paper but it is actually illegal under employment law. As above, there are very few circumstances in which employees are not entitled to the National Minimum Wage, and this isn’t one of them. The same rules apply as a full time live-in job – the National Minimum/Living Wage and the same Accommodation Offset Rates. Paying utility bills could be a huge grey area – is this included or a chargeable extra?
When accommodation is provided only some of the time
The Daily Accommodation Offset Rate allows employers to apply a deduction in lieu of accommodation that is not a permanent provision. As an example, let’s look at an equine job with accommodation provided some of the time…
- 5 day week
- live out
- some overnight shifts in the foaling season
- salary: National Minimum Wage
Let’s assume this job is a 40 hour week (7am-1pm / 3.30pm-5.30pm). From April 2020 the gross hourly salary for a 25< year old is £8.72, or £348.80 for a 40 hour week. If during the foaling season the employee regularly lives in from Wednesday to Saturday to foal-watch, the employer is within their rights to deduct £8.20 per day (or night) that the employee inhabits the accommodation. Nothing more. In this instance, the weekly offset rate does not apply, even if no one else uses the accommodation in between times.
Equine jobs with accommodation – tax implications
It is the responsibility of both the employer and employee to ensure that they fully understand the tax implications and exemptions regarding the provision of accommodation with a job.
You can find out more about the type of accommodation you do and don’t pay tax on via the Government website here.
Employers can find out more about tax and National Insurance reporting obligations on the Government website here.
When your employer provides you with living accommodation because of your employment, you must include it in your tax return. HMRC provide help sheets for employees filing their self-assessment forms here.
As an equine recruitment agency, we believe we can have a role to play in our interaction with employers and employees by making accurate advice and resources easily accessible, in the right way, at the right time. We will not advise in detail in areas we are not experts in but we will refer you to associations and specialists who could help in your case more specifically. If you would like free, friendly, impartial, professional advice as a start point on any aspect of your job hunt or recruitment drive please do contact us.