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During the period 6 April to 30 June 2023, Patience’s granddaughter was provided with a free place at the private school run by Patience’s employer. The normal fee payable would have been £4,600. The additional marginal expense of providing the place for the grandchild was £540.
The above adjustment was provided for calculating income tax in the study hub. Only 540 was considered a taxable benefit by them.I understand the reason for 540 being a taxable benefit as the employer is incurring extra cost for it to give it to employee’s granddaughter, but Can you please explain why the 4600 fee has not been considered a taxable benefit when the employee received the facility for free with no charge for his granddaughter?
the company would claim the 4600 as an expense.
the BIK is the marginal expenseHowever, since it is a cost for the employer, shouldn’t it be seen as a taxable benefit for the employee? please help me in comprehending the reasoning behind this.
I see , Thank you for the response. I am still trying to grasp it but I am truly grateful for the assistance.
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