Employment income

Question 1

What should a gift to an employee be charged as for the employment income working?

Answer 1

Higher of:

• current MV
• original MV less amounts already taxed (MV - (MV x 20% x y/12))

Question 2

What are exempt BIK?

Answer 2

 Childcare facilities run by/on behalf of employer (workplace nurseries)
 Mobile phone (even for private use)
 Loans ≤ £10,000 p.a.
 Personal incidental expenses while staying away on business (£5 per night =
UK; £10 = abroad)
 Work buses and subsidies to public bus services
 Max £8,000 removal expenses on relocation
 Cost of officially recommended treatments (up to £500 per employee) to help
employee return to work after ill health or injury
- car parking
- pension advice

Question 3

How do you account for a bonus?

Answer 3

• earlier of approved and received

- lump sum, do not pro-rate

Question 4

How do you treat a general allowance provided by the employer?

Answer 4

Include the whole amount as employment income and deduct any ALLOWABLE expenditure (not expenditure)

Deductible for employer

Question 5

How do you treat a specific entertaining allowance provided by the employer?

Answer 5

Include as income and deduct any entertaining allowances

Full allowance is disallowable for the employer

Question 6

How do you treat entertaining expenses that are reimbursed directly by the employer?

Answer 6

Exempt income for employee therefore no inclusion in employment income working

Reimbursal disallowable for employer