BENEFITS IN KIND all employees - PowerPoint PPT Presentation

1 / 15
About This Presentation
Title:

BENEFITS IN KIND all employees

Description:

Non-cash awards are exempt IF. Period of service was 20 ... Late night taxis. Travel costs exceptionally incurred where car sharing arrangements break down. ... – PowerPoint PPT presentation

Number of Views:86
Avg rating:3.0/5.0
Slides: 16
Provided by: deptacco
Category:

less

Transcript and Presenter's Notes

Title: BENEFITS IN KIND all employees


1
BENEFITS IN KIND all employees
Theory and practice of taxation A Module Code
C33TA1 Lec7
  • MISCELLANEOUS

2
BENEFITS IN KIND all employees MISCELLANEOUS 1
  • LONG SERVICE AWARDS
  • Generally taxable
  • BUT
  • Non-cash awards are exempt IF
  • Period of service was 20 years or more
  • No similar award has been made in past 10 years
  • Cost does not exceed 50 per year of service

3
BENEFITS IN KIND all employees MISCELLANEOUS 2
  • SUGGESTION SCHEMES
  • Generally taxable BUT an Extra-statutory
    concession exempts awards where
  • There is a formal scheme open to all employees on
    equal terms
  • Suggestion is outwith the scope of the employees
    normal duties
  • Either the award is 25 or less OR it is not made
    until after implementation of the suggestion
  • Awards gt 25 reflect the importance of the
    suggestion And either
  • Do not exceed 50 of the expected net benefit
    during the 1st year of implementation OR
  • Do not exceed 10 of the expected net financial
    benefits over a period of up to 5 years
  • Awards gt 25 are shared equitably between
    employees making the same suggestion
  • If the award exceeds 5,000 the excess is taxable

4
BENEFITS IN KIND all employees MISCELLANEOUS 3
  • REMOVAL EXPENSES AND BENEFITS
  • Includes Legal/Estate agents fees surveys
    temporary accommodation, transport of property
    interest on bridging loans, etc
  • NO TAXABLE BENEFIT ON FIRST 8,000 OF SUCH
    EXPENSES
  • (Any excess is taxable)
  • PROVIDED
  • Employee does not already live within reasonable
    travelling distance of his new employment and
    will do so when he moves
  • Expenses are incurred/benefits provided by the
    end of the tax year following the tax year of the
    start of the new employment

5
BENEFITS IN KIND all employees MISCELLANEOUS 4
  • WORK RELATED BENEFITS
  • The cost of a work place nursery is not taxable
    BUT
  • Cash/vouchers supplied to obtain nursery
    facilities are taxable
  • Sports/Leisure facilities available to employees
    and not available to the general public are
    generally not taxable benefits BUT
  • Membership fees for sports clubs are taxable
  • Generally no benefit arises on assets or services
    used in performing the duties where any private
    use is insignificant
  • Welfare counselling etc is exempt if the benefit
    is available to all employees

6
BENEFITS IN KIND all employees MISCELLANEOUS 5
  • BICYCLES AND MOTORCYCLES
  • Employers may pay a tax-free sum to employees who
    use their own
  • bicycles - 20p per mile or
  • motor cycles - 24p per mile
  • cars and vans- 40p per mile (each mile over
    10,000 25p per mile)
  • on business travel
  • If the employer does not make a payment the
    employee may claim the tax-free amount (or any
    balance)
  • there is no taxable benefit re any bicycle and
    bicycle safety equipment, supplied to employees
    by an employer (provided they are supplied to
    employees generally)

7
BENEFITS IN KIND all employees MISCELLANEOUS 6
  • TRAVEL
  • There is NO taxable benefit in respect of
  • Work buses
  • Subsidies to public bus services
  • These are exempt benefits
  • Transport/overnight costs where public transport
    is disrupted by industrial action
  • Late night taxis
  • Travel costs exceptionally incurred where car
    sharing arrangements break down.

8
BENEFITS IN KIND - Higher paid employees and
directorsMISCELLANEOUS 1
  • VANS AND HEAVIER COMMERCIAL VEHICLES
  • If a van (of normal maximum laden weight up to
    3,500kg) is made available for an employees
    private use, there is an annual scale charge of
    500, or 350 if the van is at least four years
    old at the end of the tax year.

9
BENEFITS IN KIND - Higher paid employees and
directorsMISCELLANEOUS 2
  • OTHER ASSETS MADE AVAILABLE FOR PRIVATE USE
  • Assets made available are taxable on an annual
    value of 20 of the market value when first
    provided as a benefit to any employee, or on the
    rent paid by the employer if higher.
  • If the asset is subsequently sold to the employee
    the taxable benefit on acquisition is the greater
    of
  • Current market value minus price paid by the
    employee OR
  • Market value when first provided minus any
    amounts already taxed (ignoring any contributions
    made by the employee) minus the price paid by the
    employee.

10
BENEFITS IN KIND - Higher paid employees and
directorsMISCELLANEOUS 3
  • EXAMPLE ASSETS MADE AVAILABLE FOR PRIVATE USE
  • A suit costing 400 is purchased by an employer
    for use by an employee on 6 April 2005. On 6
    April 2006 the suit is purchased by the employee
    for 30, its market value then being 50.

11
BENEFITS IN KIND - Higher paid employees and
directorsMISCELLANEOUS 4
  • The benefit in 2005-06 is 400 X 20
    80
  • The benefit in 2006-07 is 290, being the greater
    of


  • (a) Market value at acquisition by employee
    50
  • Less price paid

    30


  • 20


  • (b) Original market value

    400
  • Less taxed in respect of use

    (80)


  • 320
  • Less price paid

    (30)


  • 290

12
BENEFITS IN KIND - Higher paid employees and
directorsMISCELLANEOUS 5
  • COMPUTER EQUIPMENT
  • The first 500 of any benefit which arises under
    the above rules in respect of computer equipment
    made available for the private use of an employee
    or a member of his family/household is exempt.
  • If the benefit exceeds 500, the excess is
    taxable.

13
BENEFITS IN KIND - Higher paid employees and
directorsMISCELLANEOUS 6
  • ASSETS SOLD TO EMPLOYERS
  • If an employee sells an asset to his employer
    (for example his house when he is being
    relocated), there is a taxable benefit of the
    amount paid minus the market value of the asset.
    If the employer pays his own transaction costs
    (for example solicitors fees), they do not count
    as a taxable benefit. However, if the employer
    pays the employees transaction costs, there is a
    taxable benefit unless a specific exemption (for
    example the removal expenses exemption) applies.

14
BENEFITS IN KIND - Higher paid employees and
directorsMISCELLANEOUS 7
  • PAYE TAX LIABILITIES
  • If a company pays any tax which should have been
    deducted from a directors (not an employees)
    remuneration under PAYE but was not so deducted,
    any amount not made good by the director is a
    taxable benefit.
  • Directors with no material interest in the
    company (that is, not more than 5) who are full
    time working directors or who work for non profit
    making or charitable companies are excluded from
    this rule.

15
BENEFITS IN KIND - Higher paid employees and
directorsMISCELLANEOUS 8
  • MEDICAL SERVICES AND INSURANCE
  • The cost of medical diagnosis and treatment
    provided by an employer is a taxable benefit,
    except for the cost of routine check-ups.
  • Private medical insurance premiums are also
    taxable benefits, except for premiums or extra
    premiums to cover treatment when the employee is
    outside the UK in the performance of his duties.
Write a Comment
User Comments (0)
About PowerShow.com