Relocation for work purposes may be required in a number of circumstances. Some examples are:-

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1 Relocation Policy Aim of the Policy It is the policy of Kelda Group to support new and existing employees in relation to relocation where required, in order to take up a new position or attend their new place of work. Relocation for work purposes may be required in a number of circumstances. Some examples are:- The Company s ongoing business needs may require colleagues to move to a different work base due to a change in operational circumstances. Colleagues may be required to relocate in order to work on a long term assignment. Colleagues may choose to move location in order to progress the development of their career. Scope of the Policy This Relocation Policy applies to all colleagues in the Kelda Group Ltd and its wholly owned group companies in the UK, including Yorkshire Water Services, Keyland Developments, Loop and Kelda Water Services which includes KWS Alpha, KWS Defence and KWS Grampian. Process and Application Eligibility Re-imbursement of relocation expenses will be made:- Where the Company considers relocation to be a necessary requirement or to be in the best interests of the business, and Where the employee s existing home is not within reasonable distance of the new workplace, i.e. a move equivalent to excess travelling of 30 miles each way or more, or an increase in travelling time of at least one hour each way, and Where the individual moves to within 1 hour s travelling time of their base location, unless operational requirements dictate that an individual should live within a shorter specified distance of their operational base, e.g. if on a standby rota, and Where the employee has to change their permanent residence, and Where expenses claimed are supported by receipts Relocation Package Where an individual is appointed to a new role/location, agrees to a new role/location, or is required to transfer to a new base location, depending on their circumstances they may be entitled to receive either: a) A monthly 'transfer allowance' to offset the excess travel costs incurred (see transfer of base policy ) or; b) Relocation assistance - where an individual intends to move their permanent residence in order to take up a new position or attend their new place of work. Within 6 months of the offer being made an individual who is offered relocation terms within this policy will be required to make a decision in writing, between either excess travelling payments for 2 years (1 year for voluntary transfers) or house relocation (relocation assistance). 1

2 i. Relocation Assistance Relocation assistance is available to individuals who intend to move their permanent residence for a period of open duration to undertake work for the Kelda Group. Relocation assistance will be personally tailored for each employee and the package will be dependent upon an individual s circumstances, such as salary band, whether a decision is made to buy a new property or to rent, current property size and value, and costs incurred of relocating into a new area. An individual s package will be capped as follows: Individuals within Bands 3, 4, 5 and 6 who are transferred or choose to relocate to a different base may qualify to be reimbursed for relocation expenses arising out of the transfer up to a global ceiling of 8,000. Individuals within Bands 1 and 2 will be reimbursed for expenses up to a global ceiling. The ceiling will be set within a range, subject to a minimum of 8,000 and up to a maximum of 15,000. This will be determined on an individual basis. ii. Taxation Certain removal expenses and benefits are exempt from tax and National Insurance up to a limit of 8,000. Tax relief is only available if a move finally occurs and the expenses are incurred before the end of the tax year following the tax year in which the relocation commenced (i.e. the date of the transfer of work location). If at any time the individual s intention to move permanently ceases, any relocation assistance will be become subject to tax and NI. The 8,000 tax relief is for the entire relocation and not for each tax year of the relocation period. At the end of the tax year, any expenses paid tax-free that exceed the 8,000 limit will be disclosed to HMRC on a P11D and will be liable for taxation. Unless prior express authorisation is given by a Senior HR Business Partner, any tax and NI liability in excess of the 8,000 will be the responsibility of the employee. iii. Reimbursed expenses The following expenses and benefits are exempt from tax and National Insurance Contributions (NIC s) up to a limit of 8,000* and may be reimbursed to the employee up to an agreed limit, on submission of receipts:- (* In line with HMRC rules on Relocation Expenses). Cost of disposal of the old property Legal expenses connected with the sale of a property Estate agents fees Mortgage redemption fees Disconnection of public utilities Cost of acquisition of new property Legal expenses connected with the acquisition of a property Survey and valuation fees reasonable fees will be reimbursed in order to obtain a mortgage. Wider surveys will not normally be supported. Stamp duty on an equivalent type property Land Registry in England and Wales Fees payable to the Keeper of the Registers of Scotland Fees payable to the Land Registry in Northern Ireland or the Registry of Deeds for Northern Ireland Connection of public utilities 2

3 Cost of Removal Temporary storage fees (where necessary) for up to 6 months Removal expenses including packing and unpacking for one move only Cost of travelling and subsistence Temporary Accommodation: Hotel / B&B or rented accommodation will be paid until permanent new accommodation is available for a maximum of six months. Excess travelling expenses - for a maximum of six months or until new accommodation is available, whichever is shorter. These include:- - preliminary visits to the new location - travelling between the old home and the new work location - travelling between the new home and old work location (where the house move takes place before the job transfer) - travelling between the old home and temporary living accommodation - travelling between the new home and temporary living accommodation (where the house move takes place before the job transfer) - travelling from the old home to the new home when the move takes place If the employee is living on a temporary basis near their place of work, but their family are still at their old residence, the Company will pay reasonable commuting costs at weekends between the temporary and family home residence for a maximum of six months or until new accommodation is available, whichever is shorter. Cost of duplicate expenses Replacement of fixtures and fittings - up to a maximum of 8% of basic salary. Replacement can include items such as carpets and curtains, and should be replaced on a like for like basis not an opportunity to upgrade items. iv. Expenses not included Exemption from tax and NICs is only applicable to certain types of expense or benefit. The following costs do not qualify for re-imbursement:- mortgage or housing subsidies if the employee moves to a higher cost area stamp duty above the threshold of the cost of the house you are moving from compensation paid for any loss on sale of the employee s home any capital gains tax incurred by virtue of any profit made on the sale of house interest payments for the mortgage on the employee s existing home re-direction of mail council tax bills utility bills purchase of new school uniforms for employee s children compensation for losses, such as costs of joining a new sports/social club, having to give up a part used season ticket, penalty for insufficient notice of a child s withdrawal from school. v. Agreeing the Relocation Package Where relocation is chosen, the line manager should meet with the individual to explain this policy and their individual entitlement. Relocation assistance is granted on an individual basis and therefore it is particularly important that the line manager explains the extent and terms of the relocation package offered. When deciding the appropriate package for individual cases, the appropriate Senior HR Business Partner should be consulted to ensure consistency of approach. Once agreed, the individual should be given written confirmation of their agreed relocation package and should be asked to complete and sign the house removal scheme relocation expenses agreement. Once an employee has exhausted their relocation assistance, no further costs will be paid by the Company. 3

4 If an individual changes their intention to relocate their permanent residence and subsequently do not complete their move into the new area, it is the Company s discretion to recover any relocation assistance paid. vi. Timescales If a decision is made to move house, the move must take place within the Inland Revenue limits of no later than the end of the tax year following the year of the transfer of base, to qualify for relocation payments. Any excess travel payments received (whilst deciding whether to move house or during the period leading up to the actual house move) will be taken into account in calculating the total amount of relocation expenses payable, e.g. 8,000. Relocation Leave Employees are entitled to two days paid leave to finalise arrangements and complete their house move. Reimbursement of Relocation Expenses Reimbursement will be based on actual expenses incurred subject to the provision of receipts of payments made. All claims for reimbursement of costs must be approved by the individual s Line Manager. The Line Manager must keep an up to date record of all payment made for Inland Revenue and Audit purposes. Redeployment under the Conduct and Capability Policy In the case of a compulsory transfer arising as an outcome of the Conduct and Capability Policy, the Relocation Policy will not apply, but the Company will take into account all the circumstances before deciding whether any assistance is appropriate. Transfer of Both Partners Where both partners are employed by the Group and are both transferred to the same location, only one will be entitled to claim the full range of terms within this policy. The other may be entitled to claim excess travelling costs if applicable. Recovery of Relocation Expenses If an individual voluntarily leaves the Company or is dismissed, they must repay to the Company, the amount of the relocation expenses received on the following basis:- Time scale from the date of the last payment made to the individual Percentage of total gross relocation payment to be repaid Leave date up to 12 months 100% Leave date between 12 and up to 24 months 50% 4

5 REPAYMENT OF RELOCATION EXPENSES AGREEMENT Employee name: Relocating from: Date of relocation: Relocating to: For the twenty four months following the date of the last relocation payment, all relocation expenses incurred are repayable in accordance with the Relocation Policy as follows:- Time scale from the date of the last payment made to the individual Percentage of total gross relocation payment to be repaid Leave date up to 12 months 100% Leave date between 12 and up to 24 months 50% Your manager will only authorise the reimbursement of relocation expenses once they have received a signed copy of this Agreement Please sign below and return to your line manager. In the event of termination of employment within twenty four months of the date of the last relocation payment, for any reason other than redundancy, retirement (including early retirement on medical grounds) or death in service: I AGREE TO REPAY THE COMPANY THE APPROPRIATE AMOUNT OF RELOCATION EXPENSES IN ACCORDANCE WITH THE RELOCATION POLICY. I AGREE THAT THESE EXPENSES MAY BE DEDUCTED FROM MY FINAL SALARY, OR ANY OTHER PAYMENTS DUE TO ME ON TERMINATION OF EMPLOYMENT. I ALSO AGREE WITHIN 6 MONTHS TO CONFIRM IN WRITING MY INTENTION TO EITHER RELOCATE OR TO CLAIM EXCESS TRAVEL. Signed:... Senior HR Business Partner Date:... Signed:.. Date: FOR LINE MANAGER USE ONLY: A scanned signed copy of this form must be sent to Kelda Payroll. 5

6 Version Control Last Update: 17 October 2014 Next Review Update: 16 October 2015 Policy Owner: Employee Relations 6