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Taxable benefit on accommodation.

Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA TX-UK Exams › Taxable benefit on accommodation.

  • This topic has 3 replies, 2 voices, and was last updated 1 month ago by JillyB.
Viewing 4 posts - 1 through 4 (of 4 total)
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  • April 2, 2023 at 1:21 pm #682152
    Naksh
    Participant
    • Topics: 1
    • Replies: 1
    • ☆

    Quinton was provided with a company flat in January 2022. The rateable value of the flat is £1,200. The property cost his employer £125,000, but was valued at £150,000 in January 2022. Quinton paid rent of £500 in each tax year.
    Required
    What is the taxable benefit for 2022/23, assuming:
    (c) His employer purchased the property in 2020?

    When calculating the taxable benefit for an employee, shouldn’t we use the higher value between the annual value/ rateablevalue and the rent paid by the employee? In this specific scenario why is the rent being deducted from the annual value instead.

    Annual value = 1,200
    Less rent paid= (500)
    700
    Additional amount (£125,000 – £75,000) × 2% =1,000
    Taxable benefit =1700
    This is the solution given.

    April 3, 2023 at 9:49 am #682179
    JillyB
    Moderator
    • Topics: 0
    • Replies: 349
    • ☆☆☆

    It’s being deducted because the employee made a contribution towards the cost of the rent therefore reducing the beneift

    April 3, 2023 at 5:29 pm #682187
    Naksh
    Participant
    • Topics: 1
    • Replies: 1
    • ☆

    Thank you

    April 4, 2023 at 11:27 am #682204
    JillyB
    Moderator
    • Topics: 0
    • Replies: 349
    • ☆☆☆

    no worries

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