Chapter 2: Employment income (accomm,living exp. ,assets for private use)) Flashcards
Job related accommodation
Exempt benefit
if meets following criteria:
-Neccessary - employee is a representative occupier (caretaker ex.)
-improves performance and is customary in that particular job (pub landlord/vicar)
-Accom is provided for personal security
Non-job related accommodation
In ref material
Annual value + additional charge if cost>75,000
depends if rented by employer or owned
Non-job related accommodation
(Employer owns the property)
Employee is taxed on the annual value. This is the deemed rent that would have been earned has the property been let out to a third party
Non-job related accommodation
(Employer rents the property)
Taxable benefit is the greater between rent paid and annual value
No additional charge if renting!!!
Additional cost is accom costs over 75,000
Excess of 75,000 * HMRC official rate of interest
In ref material
2%
Additional rate of benefit = (cost - 75,000) x official rate of interest
Costs includes any improvements prior to the start of the tax year - do not include improvements taken place in year
Assessable benefits for accomodation - other specific rules
Employer purchased the accommodation more than 6 years before employee moves in, then market value at time of employee moves in should be substituted for the cost figure
Employee cost contributions to the annual rent is deducted whatever the situation
Living expenses
Not job related
Benefit = cost to the employer
Living expenses
Job related
Benefit = cost to employer but capped at 10% of earnings
Total employee earnings + other non-accom benefits
Living expenses - accommodation is job related
Benefit is restricted to max 10% of total employee’s earnings and other, non-accomm, benefits
Assets used privately
Remains the property of employer
benefits for use = market value x 20%
benefit reduced if contribution
Assets used privately
subsequently acquired by the employee there is a further benefit
Benefit for the gift = Higher of:
Market value of asset when ‘gifted’
Market value at first use of asset less any benefits already assessed for use of asset
Benefit reduced if contribution
