The following Employment Tax guidance note Produced by Tolley provides comprehensive and up to date tax information covering:
If an employer gives an asset to an employee (ie the employer transfers ownership of the asset), a taxable benefit arises. Examples of assets that could be transferred to employees are computers, company cars and office furniture. These rules apply equally to employees and directors, therefore all references to employees in this note include directors.
With any employment reward, if the asset is provided or transferred by a third party, rather than the employer, it is worth considering whether the disguised remuneration provisions in ITEPA 2003, Pt 7A, ss 554A–554Z21 apply, as those rules have priority over most of the other rules for taxing employment income. The rules are discussed in detail in the Disguised remuneration ― overview guidance note.
There are three possible types of asset transfers one could come across:
transfer of a new asset (ie unused and undepreciated)
transfer of a used or depreciated asset which has not been used by any employees
transfer of a used or depreciated asset which has been provided for use by one (or more) employees
The cash equivalent of the benefit is different depending on which of these three situations applies. Where the asset transferred to the employee is a car or a computer the calculation of the rules are altered (see the exceptions below).
The usual rule is that the cash equivalent of the benefit is the greater of (1) and (2) below:
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