Employment income Flashcards
Vouchers
Employees are taxable on the provision of
- cash vouchers (sum of money for which voucher exchanged)
- credit tokens (cost to employer less any amount paid by employer)
- vouchers exchangeable for goods and services (cost to employer less any amount paid by employee)
Living accomodation
No tax on job related accommodation - must be necessary, customary or security (director can only claim if <5% shares)
Non job related:
Basic - higher of annual value or any rent paid by employer
Additional: If property over £75,000 (it will be) cost - £75,000 x official rate of interest
Living accomodation: market value rule
If acquired by employer more than 6 years before provided to employee use value of property when first provided not original cost (for liability to additional property charge)
Expenses connected with provision of living accomodation
Heat and lighting
Council tax and water
Cleaning, repairs, maintenance, decoration
Taxable benefit is cost to employer less any employee contribution
Where an employee is provided with furnished living accommodation the employee will also have a taxable benefit for private use of furniture (see 20% rule)
If the accommodation is job related
Additional expenses are limited to 10% of employee’s net earnings
20% rule
A taxable benefit arises to an employee who is provided with an asset for private use. TV, computer, camera, yacht, private jet
the amount of the benefit is higher of
rent paid by employer
20% of MV when first produced
Cars & fuel for private use
- time apportion if not available for more than 30 days
% x list price = taxable benefit
Reduce if employee contributes
Pool car rules
available for use by any employee, not kept overnight at or near employee’s residence. No taxable benefit.
Fuel benefit
% x 24,100 = taxable benefit
no reduction if employee makes a partial contribution
Vans for private use
In the case of vans, private use does not include travel to work as long as no other private use
Benefit is £3,350. Separate charge for fuel. £633.
Computers
No taxable benefit if private use not significant
If significant, needs to be apportioned for the non business use
In House benefits
marginal cost (eg private school place to children of employees would be the cost of the extra seat)
Exempt benefits
- employer pension contributions
- trivial benefit of less than £50 which is not cash or a cash voucher and for non work reasons
- pension advice and associated tax planning of up to £500 a year
- one mobile telephone
- free or subsidised meals
- social events (max £150 per head)
- entertainment by 3rd party
- non cash gifts from third parties £250 per tax year from same donor
- provision of a parking space at work
- awards of up to £5,000 under a staff suggestion scheme
- sports and recreation facilities available to employees but not the public
- WFH payments of up to £4 per week
- Personal incidental expenses if required to stay away overnight, £5 per night UK £10 per night abroad
- Travel expenses if travel disrupted
- use of bicycles / safety equipment
- reasonable removal expenses for a new employment position
- non cash long service awards of 20+ years not exceeding £50 per year of service
- Eye tests and glasses for employees who use VDU equipment
- Health screening assessment (one per year)
- Cost of oficially recommended medical treatment to facilitate return to work
- loans not exceeding £10,000
- Overseas medical treatment and insurance if working abroad
- reimbursement of own vehicle under stat mileage rate scheme
General rule for employee expenses
Wholly, exclusively and necessarily in the performance of duties
Qualifying travel expenses
- the expenses were necessarily incurred in performance of duties
- not ordinary commuting
- however if site based travel from home to work allowable
- if home is work, travel from one work location to another is allowable
- if temporary workplace (under 24 months) travel is allowable
