288. Cash equivalent of the benefit under the residual charge.

The 'cash equivalent' of the employment-related benefit is treated as earnings from the employment for the tax year in which it is provided1. The cash equivalent is the 'cost' of the benefit, which for most benefits is the expense incurred in or in connection with the provision of the benefit less any part of the cost made good by the employee2. Cost for this purpose can be calculated using marginal cost and not average cost