- This topic has 5 replies, 2 voices, and was last updated 20 hours ago by
.
- Posts
Dear tutor,
Why this free payable of tuition fee (otherwise she has to pay £4,600) is not taxable? As per law, only workplace nursery service for childcare is exempt benefit. Besides, this is her granddaughter, not her daughter. How can it be?
“Between 6 April and 30 June 2023, Diana’s granddaughter attended the private school operated by Patience’s employer at no charge. The standard tuition fee for this period was £4,600, while the additional marginal expense of providing the place was £540.”
Can you please enlighten me?
Thank you in advance!It’s an employment benefit, and the general rule for benefits provided by an employer is ‘cost to the employer’. In this case, it’s an ‘in house’ benefit; i.e. she works for the private school, so the benefit on the employee is ‘marginal cost’ which again is the cost to the employer (the additional cost of sending an extra pupil).
Note that it’s a SCHOOL, not a nursery (workplace or otherwise). If it was a workplace nursery, it would be an exempt benefit.
Also not that whether it’s her daughter or granddaughter is irrelevant in both scenarios.
Thank you for your answer.
So, it means that in house benefits are tax free, while marginal costs to deliver those benefits is taxable?
In house benefits are tax free if there is no additional cost to the employer of providing them. For example, if you worked for a bus company and were allowed to use its busses for free, then on the assumption that there is no additional cost of you being on the bus, then there is no benefit.
- You must be logged in to reply to this topic.