Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › Income tax
- This topic has 5 replies, 2 voices, and was last updated 3 months ago by JillyB.
- AuthorPosts
- August 12, 2024 at 7:26 pm #709583
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?
August 14, 2024 at 5:49 pm #709695the company would claim the 4600 as an expense.
the BIK is the marginal expenseAugust 14, 2024 at 5:57 pm #709696However, 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.
August 15, 2024 at 1:38 pm #709735No the rule says it’s the marginal cost. its the rule
August 16, 2024 at 6:01 pm #709900I see , Thank you for the response. I am still trying to grasp it but I am truly grateful for the assistance.
August 16, 2024 at 6:38 pm #709907Watch the lecture again and try some practice questions
- AuthorPosts
- You must be logged in to reply to this topic.