Employment Income Flashcards
(34 cards)
What is the limit on exempt relocation expenses?
£8,000.
When an asset that was being loaned is transferred permanently to an employee - what is the valuation?
Higher of:
- market value when gifted - what employee paid on purchase
- market value when first provided - benefit whilst asset was loaned - what employee paid on purchase
What are deductible expenses from employment income?
- Professional subscription fees
- A proportion of expenses if required to work from home
- Necessary tools, uniforms, protective clothing
- Employee’s contributions into the OCCUPATIONAL pension scheme
Where an employee is reimbursed expenses by the employer - is this treated as taxable income?
- Yes.
- This is exempt where an employee is reimbursed for client entertaining expenses.
Where the asset being given to an employee is a car, van or bike the benefit is always…?
The current market value.
If a loan is repaid partially, what two methods do you choose the lower of?
- Average method
- Strict method
For salary sacrifices, what do you choose the higher of?
Higher of:
- cash given up
- taxable benefit value
What 3 conditions have to be met for a long service award to be exempt?
- The employee has worked for the company for at least 20 years.
- The award is less than £50 per year of service.
- You have not given them a long-service award in the last 10 years.
Is state pension taxable?
Yes.
When accommodation is above £75,000 - what is the additional charge?
(Cost/MV - £75,000) x interest rate x time apportionment
If the accommodation has been owned for more than 6 years, do we still take the original cost or market value?
Market value.
Are any improvements to the accommodation made in the tax year added to the value?
No, must be before the tax year.
What is the company van benefit charge?
£3,960 x time apportionment
What is the company van fuel charge?
£757 x time apportionment
Is partial contribution allowed for both car & fuel provided by employer?
No.
In regards to multiple staff parties attended by an employee, what is exempted and what is not?
- If the total number of parties attended is less than £150 per head than it is exempt. If not, then the higher costing party can be exempted. This can apply for multiple events where 2 of the 3 may by exempted due to being less than £150 combined.
- This does not serve as a partial exemption however.
What is the calculation of the average method for loan benefit?
(Balance of loan at start of year + Balance of loan at end of year / 2) x 2.25% x time apportion
What is the benefit on living expenses capped at?
10% of net earnings.
What constitutes living expenses?
- Bills paid by the employer
- Loan of furniture
How is net earnings calculated?
Deduct everything from salary, bonus etc. (incl. taxable benefits, SMRS, pension contributions) but living expenses.
How is net cash?
Value - income tax - NICs
If accommodation is job-related, is there taxable benefits on annual value and expensive living charge?
No, there is only taxable benefit on living expenses capped at 10% of net earnings.
Can you deduct client entertainment expenses from a general sum allowance?
No - must be an allowance specifically for client expenditure and there must be evidence of the expenses.
If private fuel is not available for part of the year but it becomes available to the employee later on in the tax year - is their time apportionment?
No.
