CH 11 - Intro. to Employment Income & Benefits

Question 1

Describe rules for taxed employees earnings at the date of receipt

Answer 1

For cash payments, this means the earliest of:
* ‘Rule 1’ – the date that the payment is physically made; or
* ‘Rule 2’ – the date the employee becomes legally entitled to the payment.

Question 2

Describe rulles for taxed directors earnings at the date of receipt

Answer 2

EARLIEST OF:

• Rule 1’ – the date that the payment is physically made;
• ‘Rule 2’ – the date the director becomes legally entitled to the payment; or
• ‘Rule 3’ – the earliest of:
  1. a. the date when the sums on account of the director’s earnings are credited in the company accounts; or
  1. b. at the end of the company’s accounting period if the earnings have been determined by the end of that period; or
  1. c. at the date the earnings are determined if that date falls after the end of the company’s accounting period.

Question 3

Name the case which determined how benefits should be measured (cash equivalent).

Answer 3

Pepper v Hart
determined that cost means marginal cost
(not average cost)

Question 4

Which benefits can’t be included on PAYE by employer?

Answer 4

accommodation and beneficial loans
can’t be included as a taxable benefits in the payroll

if not included on payroll must be reported on P11d

Question 5

Deadline for submitting P11d?

Answer 5

6 July after the end of the tax year

(contribution deadline is 1 June)

(by 31 May employer must provide employees with detailes of payrolled benefits)

Question 6

Which social security benefits are taxable?

Answer 6

• jobseeker’s allowance
• employment and support allowance
• bravement allowance
• carer’s allowance
• incapacity benefit

taxable social sec. benefits

ITEPA 2003 s.660