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Got a slight problem , any help is appreciated 😉
which of the two methods is correct for calculating employee benefit for private use of company car
?
List price × Appropriate % xxx
less : Employee contribution (xxx)
. ………………
Benefit xxxOR
List price xxx
less : Employee contribution (xxx)
………………
× Appropriate % xxx
………………
Benefit xxxList price* X
less: Employee capital contribution (max 5000) (X)
____
X
x Appropriate % x months car available for/12** X
____
X
less: Employee’s contribution to running cost
(e.g. Private use of the car) (X)
____
Benefit XX*The discounted price is not relevent
** If the car is not available for the full year e.g if it was provided on 6 Jan 2014 ie only 3 months available in 2013/14 the calculation would be = x Appropriate % x 3/12I hope this is helpful 🙂
Hi Lisa
Amy is right that both methods you showed may be correct as it depends on whether the employee contribution is an original capital contribution towards the cost of the car which reduces the list price, and/or whether it is a revenue contribution paid each year for the benefit of being provided with the private use of the car which reduces the assessable benefit. See OT course notes page 67 and read question very carefully!
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