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Hello,
(a)Through the tax year 2018/19, Dill had the use of H’s plc’s company gym which is only open to employees of the company. The cost to H plc of providing this benefit was £780.
(b) During the tax year 2018/19, H plc paid a health club membership of £990 for the benefit of Dill.
1. In the answer, on (b) is the taxable benefit. Could you explain why?
– The general rule is that the taxable amount of a benefit is the cost of providing the benefit.
-Therefore for both scenarios the cost of providing the benefit is £780 & £990 respectively.2. Please locate where I am getting things wrong.
Thanks
In (b) the answer is as per my response to your previous question – the benefit is the full cost of the amount paid to the 3rd party
In (a) the gym is ONLY available to employees and so the benefit is the full cost to the employer of providing that benefit1.To summerize all this, cost paid to third party by the employer is a taxable benefit.
2.If however, the employer provides “in-house” benefit then there is no benefit to the employee.
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