Module 4

Question 1

When is employment income taxed?

Answer 1

The cash earnings are treated as received on the earliest of the following dates:

1
The time when payment is made; or

2
The time when a person becomes entitled to payment.

Question 2

Benefits that are provided by an employer and NOT taxable?

Answer 2

1) Payments to employees for use of OWN car for work purposes (eg approved mileage allowance)

2) Parking space at or near work

3) Work related training

4) Sport or recreational facilities, which are not generally available to the public

5) One mobile telephone for an employee’s use.

6) Awards for suggestions made through a staff suggestion scheme.

7) Certain types of environmentally friendly transport

Question 3

What is the annual limit to not pay tax for employee events?

Answer 3

150 per head

Question 4

Benefits that are provided by an employer and ARE taxable?

Answer 4

1
Private use of company assets

2
Vehicles provided for private use

3
Beneficial loans

Question 5

What is the conditions for a classic car?

Answer 5

Over 15 years old
AND
Worth> £15,000
AND
Market Value is more than ‘normal’ list price

Question 6

When an individual leaves employment, there are several different payments they may receive:

Answer 6

1
Payment into an approved pension scheme (lump sum contribution) – exempt from tax.

2
Statutory redundancy payment – exempt from tax.

3
Payment in lieu of notice (PILON) – this is taxable as employment income.

4
Ex-gratia lump sum – discussed in detail next.