Relocation allowance tax UK

By PaySlipCheck Editorial · Reviewed by PaySlipCheck Editorial Standards Team · 14 June 2026 · 5 min read

UK relocation allowance is one of the more generous tax-exempt BiK areas: up to £8,000 of qualifying costs can be paid by employer tax-free if the move is job-necessary and completed within 12 months of the qualifying event (job start, transfer). Qualifying costs include agent fees, stamp duty differential, mortgage/deposit costs, travel, temporary accommodation, and physical moving. Above £8,000, the excess becomes fully taxable BiK. This guide covers what qualifies + how to claim.

Verified against 4 official sources · Last reviewed 14 June 2026
On this page
  1. The £8,000 exemption
  2. Qualifying expenses
  3. Non-qualifying expenses
  4. Qualifying events
  5. Time limit
  6. What if over £8,000
  7. In short

The £8,000 exemption

Applies per qualifying relocation, per employee. Both partners in same household get one exemption between them.

Qualifying expenses

  • Estate agent + solicitor fees for old + new property
  • Stamp duty on new property purchase (differential vs old)
  • Loss on sale of old property (sale below current mortgage)
  • Bridging finance costs
  • Removal costs (physical move)
  • Travel + temporary accommodation up to 6 months
  • Utility connections + disconnections

Non-qualifying expenses

  • Council tax at old + new property overlap
  • New furniture / white goods (unless part of moving contract)
  • Cost of school changes
  • Extended commuting during transition

Qualifying events

  • Starting new job requiring relocation
  • Job transfer requiring relocation
  • Business restructuring change of workplace

Time limit

Move must complete by end of tax year after the qualifying event. E.g., job start January 2026 → move by 5 April 2027.

What if over £8,000

The excess is fully taxable BiK. £15,000 total costs → £8,000 exempt + £7,000 taxed at your marginal rate. Higher rate: £2,800 tax on the excess.

In short

UK relocation allowance up to £8,000 tax-free. Above that, excess is taxable. Qualifying costs specific — check with employer + HMRC guidance.

Frequently asked questions

What's the tax-free relocation limit?

£8,000 of qualifying expenses per qualifying relocation.

What if I spend £15,000?

First £8,000 tax-free, remaining £7,000 fully taxable BiK at your marginal rate.

Does council tax overlap qualify?

No — it's not a qualifying expense category.

Can I claim my own moving costs?

If employer reimburses under the scheme, yes. Direct claim without employer sponsorship, no.

What if I'm relocating twice in one job?

Each qualifying relocation gets its own £8,000 exemption — but employer must formally treat each separately.

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Sources

All figures on this page are sourced from official UK government publications. We don't cite secondary commentary or other calculator sites.

  1. GOV.UK — Employer-provided benefits (Expenses and benefits)
  2. GOV.UK — P11D form
  3. GOV.UK — Income Tax rates
  4. MoneyHelper — Employee benefits

All tax figures on this page use the same configuration that powers our calculators — see our editorial standards for the review process.

Last reviewed: 14 June 2026. Next review due 14 December 2026.

Disclaimer: This page provides general information based on published HMRC and gov.scot figures. It is not personal tax or financial advice. For your specific situation, please consult a qualified accountant or contact HMRC directly.