Chapter 6 - Misc Benefits

Question 1

Vans

Answer 1

Vans with unrestricted private use have a benefit of £3,350. If it’s zero emission, it’s 40% of that: £1,340
If fuel is subsidised, the benefit is £633.
There is no benefit if there’s no private use or the restricted private use condition is met ie nothing other than commuting and business travel.
No reduction for employee contributions

Question 2

Mobile Phones

Answer 2

The first phone is tax exempt, even extending to personal use.

Question 3

Vouchers

Answer 3

Cost of providing the vouchers is a taxable beneift

Question 4

Mileage Allowances

Answer 4

If the employer reimburses the employee for business mileage incurred on their own car, the amount reimbursed is compared to the limits set by HMRC. If the amount exceeds the limit, the excess is taxable, if it is less, it is deductible.

Question 5

Mileage Limits

Answer 5

Cars: 45p per mile for first 10k, 25p p/m afterwards
Motorbikes: 24p
Bikes: 20p

Question 6

Passenger Payments

Answer 6

Payments can be made free of tax to employee carrying one or more passengers if:
- the driver and passengers are fellow employees making the same journey
- the passenger payments do not exceed 5p per mile per passenger
p the employee physically receives the passenger payment from the employer
Only applies to business mileage

Question 7

Chldcare

Answer 7

Where an employee joins an employer supported childcare scheme on or after 6 April 2011 to 5 Oct 2018:
Basic rate payers: first £55 p/w exempt
Higher rate: first £28 p/w exempt
Additional rate: first £25 p/w exempt
Rates only takes earnings from that employment into account, ignores savings and divs.

Question 8

Income Assessement

Answer 8

To calc childcare voucher an employer calculates relevant earnings:
Salary
Benefits
Less: PA
Amount
Voucher amount determined by the rate band it falls in to

Question 9

Tax Free Childcare Scheme

Answer 9

Operated by the gov. Online account is used. Contributions are topped up by 25% of contribution up to £2,000 p/a per child, increased to £4,000 for a disabled child.
One account is set up per child.
Payments are topped up until the 1st Sept following a child’s 11th birthday, 16th for disabled children.
Account holders must be in work, not have adjusted net income of over £100,000 p/a and must not be a member of an employer supported scheme

Question 10

Tax Exempt Benefits

Answer 10

Employer pension contribs
Mobile phones (one per employee)
Removal expenses up to £8k
Exclusive nursery
Car parking at or near work
Staff canteens available to all employees
Incidental expenses when working away (£5 in UK, £10 abroad. Taxed in full where exceeded)
Training
Christmas party or other annual functions up to £150 per head
Long service award up to £50 per year if served at least 20 years
Additional costs of WFH under a homeworking agreement
First £500 pension advice per tax yar

Question 11

Trivial Benefits

Answer 11

If the cost of providing a benefit is less than £50, it’s tax exempt.

Question 12

PSA

Answer 12

PAYE Settlement Agreement, an employer settles the employee’s tax liab in respect of an expense or benefit.
An expense or benefit can on on the PSA if it is:
- Minor; or
- Paid on an irregular basis; or
- Given where impractical to apply PAYE or apportion

Question 13

PSA Cont.

Answer 13

Amounts on a PSA do not have to be reported on P11Ds and are not taxable on employees. Benefits must be grossed up to find the tax payable:

• x 20/80 for basic rate
• x 40/60 for higher rate
• x 45/55 for additional rate

Question 14

PSA Dates

Answer 14

Must be entered into before 6 July following the end of the first tax year to which it related. Doesn’t need to be renewed.