We would like to give a housing allowance of £2000 per year to an employee, a minister of religion. This housing allowance is not to pay for rent it is just additional as they use a study in their own house to work often, there is also a place of work provided by us the employer.
I was told to add this as a non-taxable expense but understand this is taxable.
Should I pay it in addition to the salary as an expense and just add it to the P11D?
On the P11D do I add the £2000 housing allowance under Living accommodation or other?
Thank you for your help!