Chapter 4: Taxable and exempt benefits

Question 4.1. Compute taxable benefit for accommodation

Tim was provided with a company flat in January 2019. The ratable value of the flat is £1,200.
The property cost his employer £125,000, but was valued at £150,000 in January 2019. Tim paid
rent of £500 in each tax year.
What is the taxable benefit for 2019-20 assuming:

(a) His employer purchased the property in 2017?

(b) His employer purchased the property in 2011?
(c) Tim was required to live in the flat as he was employed as the caretaker for the
company premises (of which the flat was part)?

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Question 4.2. Compute taxable benefit for accommodation
Julia is employed by Malcom Ltd. Malcom Ltd provided Julia with the use of free
accommodation (not job related) from 6 April 2019 to 5 August 2019. The accommodation cost
Malcom Ltd £99,000 in February 2016 and was previously occupied by another employee. The
accommodation had a market value of £123,000 in April 2019 and an annual value of £3,780.
What is Julia’s total taxable benefit in respect the accommodation for the tax year 2019-20?

Question 4.3. Compute taxable benefit for private use of car

Vikram is provided with a diesel car which did not meet RDE2 standard. It had a list price of
£22,000 when it was first registered. The car has a CO 2 emissions of 118 g/km.
Calculate Vikram’s car benefit for the tax year 2019-20.

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Question 4.4. Compute taxable benefit for private use of car
Shan starts his employment on 6 January 2020 and is immediately provided with a new petrol
car with a list price of £25,000. The car was more expensive than her employer would have
provided and he therefore made a capital contribution of £6,200. The employer was able to buy
the car at a discount and paid only £23,000. Shan contributed £100 a month for being able to
use the car privately. CO2 emissions are 192 g/km.
Compute car benefit for 2019-20.

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Question 4.5: Compute taxable benefit for private use of car and private fuel
Paul was provided by his employer with a new car with a list price of £15,000 on 6 April 2019.
The car emits 106 g/km of CO2. During 2019-20 the employer spent £900 on insurance, repairs
and a vehicle license. The firm paid for all petrol, costing £1,500, without reimbursement. Paul
paid the firm £270 for the private use of car.
Calculate the taxable benefits for private use of the car and private fuel.

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Question 4.6: Compute multiple taxable benefits (Comprehensive question)
Holder is working as a software developer in a local company. His employer provided him the
following benefits during the tax year 2019/20:

a) Company provided Holder a new diesel car that did meet RDE2 standard. It had list price of
£31,000 and Holder contributed £2,500 towards the purchase price of the car. CO 2
emissions of car is 117 g/km.
b) Company also provided Holder fuel for private use during 2019/20.
c) Holder was provided with a free accommodation on 6 April 2019. Company bought the
accommodation in 2016 at the cost of £88,000. The market value of the accommodation in
April 2019 was £135,500. Annual value of the accommodation is £4,500.

Required:
Compute the amount of taxable benefit in each case.

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