Budget 2004

Grant Thornton


Personal Taxation

Grant Thornton

Benefits in Kind

For directors, and employees earning at the rate of £8,500 or more per tax year including expense payments and benefits

Cars and fuel

  • benefit based on list price* for a car and £14,400 for fuel
  • set percentage determined by carbon dioxide emissions for car in grams per kilometre (g/km)percentage in most cases between 15% and 35%
  • emissions not exceeding lower threshold 15%
    • increase for each 5g/km above lower threshold 1%
    • supplement for cars running solely on diesel 3%
    • maximum percentage 35%
  • special rules for alternative and mixed fuel cars and classic cars
  • for cars registered before 1 January 1998 special rules apply
  • benefit reduced if car or fuel not available for whole year subject to fuel anti-avoidance provisions
  • no fuel benefit if employee required to pay for and actually pays for all private fuel or if fuel is only provided for business journeys

* Maximum price £80,000
155g/km 2003/2004, 145g/km 2004/2005, 140g/km 2005/2006 and later years

Vans

Vans
Under 4 years old*
4 years old and over*
 
2004/2005
2003/2004
2004/2005
2003/2004
 
£
£
£
£
up to 3.5 tonnes
500†‡
500†‡
350†‡
350†‡
over 3.5 tonnes
nil§
nil§
nil§
nil§

No separate charge on fuel provided for private motoring (benefit of £500 from 6 April 2007)
From 6 April 2005 nil charge if private usage restricted to taking van home
From 6 April 2007 single benefit of £3,000 for unrestricted private usage irrespective of age of van

* At the end of the tax year
Per van
Reduced by private use contribution and if the van is unavailable or shared
§ Unless used wholly or mainly for private purposes

Cheap loans

Benefit equivalent to excess of official rate* over interest charged
Exempt if loans total no more than £5,000

* 5% subject to review in the event of significant rate changes (different rates may apply to foreign currency loans)

Reliefs for all employees

Incidental overnight expenses

Payments to employees on qualifying trips

  • no benefit if employer pays up to £5 per night for UK trips or £10 per night for overseas trips
  • taxable in full if limit per trip exceeded

Green transport

No benefit in kind on

  • works’ buses or subsidies to public bus services
  • loan of cycles and cycling safety equipment used mainly for qualifying journeys

Computers

Loan of computer equipment to employees tax free

  • no exemption if restricted to directors and senior staff
  • value of computer equipment limited to £2,500 (reduced if related expenditure incurred)

Incidental costs of homeworking

  • tax free payment for additional costs of working at home
  • payments over £2 per week require documentary evidence

Long service awards

  • tax free non-cash gift subject to exceptions
  • after at least 20 years service
  • value of gift limited to £50 (£20 for payments pre 13 June 2003) per year of service

Staff parties

Cost of party exempt if VAT inclusive cost, aggregated if more
than one, does not exceed £150 per head per annum

The figures shown here are subject to ammendment as the Finance Bill passes through Parliament.

This information has been prepared only as a topical guide to tax and personal financial matters. No responsibility can be accepted by us for loss occasioned to any person acting or refraining from acting as a result of any material contained in this publication.

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