Week 3 - Employments & BIK Flashcards
1
Q
What is included in employment income
A
- Salary
- Bonus
- Pension
- Payroll
- Benefits in kind (BIKs)
2
Q
What is included in BIKs?
A
- Car & fuel
- Accommodation
- Running costs
- Furniture (cost x basic/higher rate)
- Loan
- Medical insurance
- Expense allowance
3
Q
How do you calculate accommodation costs?
A
Annual value of the house + ((cost of the house - £75,000) x official interest rate 2.5%)
4
Q
How do you calculate loans (BIKs)
A
Loan amount x official interest rate (2.5%) or ? x (2.5% - loan interest rate)
5
Q
How do you calculate car and fuel cost (BIKs)
A
- Cars (?g/km) - 95 (if over 95g/km) = ?/5 = ? + 23% (+4% if diesel) = X (max 37%)
- Cost of car x tax calculation
- Fuel (tax sheet) x tax calculation
6
Q
What if the house cost the employer over £75,000+
A
It is classed as “expensive”
7
Q
What happens to “benefit” if contributions are made for the house or ancillary services (repairs & maintenance, cleaning)
A
Taxable benefit is reduced by contributions made by employee by 6th July
