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Employer gives the employee interest free loan of 30,000 GBP in the start of tax year 19/20 , Employee pays back 15,000 GBP on 30 july 19 and further 15,000 on 30 October 19.There was no outstanding loan at the end of the tax year. Average method is used to calculate benefit.
I know there is no assessable benefit if loan amount does not exceed 10,000 GBP during the tax year but what if all of the loan is paid back in the same tax year ?
I calculated 30,000/2 x 2.5% =375 as assessable benefit in the exam lol because there was no outstanding amount of loan in the end of tax year and i can’t stop thinking about it because i practiced so many loan questions which were way harder then this and this simple question is bothering me since the exam ended . I know what’s done in the exam is done but can u clear my confusion.Your last line stands true! Put this behind you and start thinking about your next challenge!
If in the most unlikely situation that you have to resit this exam – then contact me again.
In the nicest possible way I hope to not therefore hear from you and wish you well in your future studies!I have started studying for the next paper sir & I am very confident that I will pass this one because 90% of the MCQ’s were piece of cake for me to solve as i studied a lot & did the revision kit 2 times but this little issue is bothering me ever since the exam , the amount of exam pressure can sometimes trick us in little problems like these , so can u please clarify if my method was correct because i can’t find anywhere this type of question in the kit or other practice questions.
With respect I cannot make an exception as any student may then ask about any questions that appeared in the exam which is not what I’m here to do, but understand that if a loan has not been extended to the employee for the entire year then the benefit must be time apportioned for the part of the year it was outstanding with the closing loan amount at that date being used in the calculation not zero as at the year end.
Now focus on you next paper and good luck with it!
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