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Chapter 04 - Taxable and exempt benefit. - Coggle Diagram
Chapter 04 - Taxable and exempt benefit.
Accomodation
Job related: Exempt
Non-job related
Property owned by employer: Taxable benefit is annual value
Property rented by employer: Taxable benefit is higher of annual value or rent paid
Additional benefit: (cost - 75,000) * 2.5%
Cost = Market value if >6 years, original price if <6 years
Living expense
Non-job related: cost to employer
Job-related: Can exceed 10% of net earning (net earning: total earning without ancillary service and use of furniture less allowable expense)
Use of furniture: Market value of furniture * 20%
Use of employer's asset
Assessed on higher of
20% of value first made to employees
Rental paid by employer
Gift of assets: Assessed on higher of
Market value of given (selling price if any)
Market value when first used - assessed taxable benefits up to date of gift
Company cars, van, and fuel
Cars benefit
Assessed on company cars, not pool cars
Benefit = CO2 % of list price
Capital contribution made by employees/directors: can't exceed 5,000 pounds
Car fuel for private motoring
Taxable benefit = Percentage (same as car benefit percentage) * 24,100
No reduction for partial refunds by employees, only cancel if full refund
Vans
Standard benefit = 3,430 a year
Additional charge for private fuel = 655
Other taxable benefit
General rule: cost to employer
Cheap/Interest-free loan
Beneficial loan: Loan only >10,000
Assessable benefit = average loan * 2.5% - Interest actually paid (if any)
2 methods of calculating 'average loan'
Average method: (Opening balance + Closing balance)/2 * Interest saved
Strict method:
Exempt benefit
Canteen
Medical treatment: Not taxable up to 500 pounds/employees
Childcare
Qualifying removal expense: up to 8,000
Car parking
Employer's contribution to pension scheme
Staff party: <150 per head per year
Sport and recreational facilities
Outplacement counselling service
Workplace parking for bicycle + tax free allowance of 20p per business mile
Weekly tax free allowance of 4 pounds for work from home
Trivial benefit up to 50 pounds/employee a year: not cash or cash voucher
Pensions advice up to 500 pounds/employee per tax year
Workplace charging point for hybrid or electric cars