living accomodation

The living accommodation is being RENTED by the company it has NOT been purchased by the company! Therefore the benefit is simply the higher of the annual value or the rent paid by the company. The annual value plus expensive accommodation benefit is only used when the property was purchased by the company. In addition the running costs paid by the employer are a further benefit (these would never go into the expensive accommodation benefit calculation in the way that you have shown. We then also include the benefit of the use of the furniture applying the normal 20% rule for other assets made available for private use. Your problem is not recognising correctly the tax issue being tested.