Asset made available to an employee (UK tax)
Where an employer makes an asset available for an employee’s private use without transferring ownership, a taxable benefit can arise. For an asset under the general rule, the annual value is normally 20% of its market value when first used to provide an employment-related benefit, or the employer’s rent or hire charge if higher, plus applicable running costs. Availability, employee payments, exemptions and special asset rules must be considered separately. Cars, vans and land have special treatment.
Worked example
An employer makes a non-exempt asset available solely to an employee for private use throughout 2025–26. Its market value when first used as an employee benefit was £5,000; there is no hire charge, additional cost or employee payment. Assuming no other adjustment, the annual benefit is £5,000 × 20% = £1,000.
Common mistake
Using the asset’s original purchase price automatically instead of its market value when first applied as a benefit, or ignoring a higher hire charge and relevant running costs.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | TX (UK) | Supporting | June 2026–June 2027 |