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Good evening,
When calculating the Living accomodation benefit, do we need to apportion the amount with respects of the number of months the person has lived in?
I have seen questions where the person started living on the 1st of July, or the 2nd of November, but no apportionment was done.
My common sense tells me the charge has to be adjusted to the number of months, but the solution doesn’t so I don’t know if the book has a mistake, or I have to charge a full year Accomodation benefit, irrespective of the lenght of use.
Many thanks in advance
The living accommodation benefit is indeed an annual benefit and if this benefit has not been enjoyed for the entire tax year it should, as you say, be time apportioned. Where have you seen the examples you quote? The only part that might not be time apportioned is if the question gave you the running expenses paid by the company but ONLY for the period it was occupied by the employee.
Many thanks for your reply!
The example I saw was on KAPLAN’s Textbook page 129 example 2
The employee was provided with the house on the first of July 2013. The cost in 2010 was £200,000 and the annual value £3,000. Official rate of interest is 3.25%.
The basic charge is £3,000
The additional charge (according to the textbook) is (200,000 – 75,000) x 3.25% , but I thought it should be (200,000 – 75,000) x 3.25% x 9/12 = £3,047 (rounded up)
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