Task 3 - Employee Benefits in kind

harrydavies18

HELP!!

I have my exam on Friday the 2nd of may at 10am,

I am really struggling to understand how to calculate the following:

1) How to work out the accommodation benefit

2) How to work out the benefit on low interest/interest free loans

Any help would be hugely appreciated!!!!

AbbyCarr

I can help with number 1, I'm not so good with loans either!

Accommodation benefit is made up of 3 parts
-Basic Charge
-Expensive Accommodation Charge
-Provision of services

The Basic charge is the higher of the Gross Rateable Value (given in the question usually) and the Rent paid by the employer.

Expensive Accommodation Charge is when the employer owns the Accommodation and it cost more than £75,000. If they bought it more than 6 years ago use Market Value instead of cost. The calculation is:
(Cost-£75000) x 3% (ORI)

Provision of services is where the employer provides additional services. Heating, rates and maintenance should all be added on. Where the use of furniture is allowed, the benefit is calculated as 20% of the market value when first provided.

Then deduct any employee contributions.

With Loans I believed the benefit to be worked out as:
Loan outstanding x 3% (ORI) and then minus any interest paid by the employee

There are rules where no benefit is charged as they are exempt.

AlisonSwanson

Loans - average of the loan outstanding at the start and end of the year, then X 3%, then minus any interest paid by employee