Taxable Benefits Flashcards
Vouchers (non cash)
Vouchers (cash)
Cost to employer less amount paid by employer
Cost obtainable less amount paid by employer
Living accommodation
No benefit if job related
Basic charge = higher of
Annual value and amount paid
Additional charge (accom cost over 75k) = (cost - 75k) x official rate of interest (2.25%)
If employee moved in more than 6 years after purchase, use MV when they moved in
Rent paid by employee is deducted from taxable benefit
Expenses connected with provision of living accommodation
Generally taxable on:
Cost to employer less amount paid by employee
Limited to 10% of income if accommodation is job related
Cars for private use
Co2% x list price
Reduced by 2% for cars registered since 6.4.2020 (H) has lists for cars after this date
Increased by 4% for cars not meeting RDE standard
Max = 37%
List price = manufacturers list price + cost of optional accessories costing £100 or more provided at a skater date
Reduce list price up to £5000 for any capital contribution made by the employee
Reduce benefit by any actual contribution made by the employee
Fuel benefit
24,500 x co2%
No reduction for partial contributions by employee towards use of the car
Vans and fuel for private use
Flare rate benefit of £3490 for private use of van
Reduced flat rate benefit of £2792 for zero emissions vans
Flat rate benefit of £666 for provision of fuel
Assets made available for private use
20% market value of asset when first provided for employee use LESS amount payable by employee
No taxable benefit if insignificant private use (one weekend away)
Any other non monetary benefit provided by reason of the employment
Cost to employer of provision less amount paid by employee
Apportionment
Apportioned on a monthly basis if not available for the full tax year
Expenses connected with provision of living accommodation (professional level new)
In addition to accommodation benefit
Employees taxed on provision of related expenses paid by employer
Heating,cleaning, repairs
Taxed: 20% MV when first made available
NON JOB RELATED ACCOM: taxed on cost to employer
JOB RELATED ACCOM: taxed on cost to employer, limited to :
10% x tax payers other net earnings excluding expenses relating to accommodation (rest of employment income)
Statutory mileage
Car/van - 45p per mile for first 10,000 then 25p after
Motorbike - 24p
Cycle - 20p
Passenger payment 5p
If payments received less than what they should be then tax deduction possible
Asset transferred to employer following private use
Given an asset previously loaned to them then a benefit arises
Taxable amount : higher of
Current market value
MV of asset when first provided less any amounts already taxed under private use rules (ignoring contributions already made by employee)
Taxable benefit is reduced by any contribution made by the employer
If asset is car van or bike taxable value is
Current market value less any contributions
Employment related loans
If employee given loan of >10,000 below market rate then a benefit arises
Calculated :
Loan balance x official interest rate (2.25%) x
Less interest paid (x)
Taxable amount x
Loan balance is given by lower of
1) Average method - (loan at start (6.4.x1) + loan at end (5.4.x2)/2
If no loan at start do from when first made
2) strict method (weighted average loan balance based on payments in the year )
Eg interest free lon of £1300 £200 paid 6 March 21
Average 1300+ (1300-200)/2 = 1200 x 2.25% = 27
Strict = 1300 x 11/12 x 2.25% = 27
1100 x 1/12 x2.25% = 2
= 29
Take average as lower
