Question

Abdul Jabbar works as a mechanical engineer at Fujairah Engineering. His employer has provided him the following taxable employment benefits during the tax year 2018/19:

On 6 April 2018 through 5 April 2019, Fujairah Engineering provided Abdul Jabbar a new petrol car that has CO2 emissions of 105 g/km. Car had list price of £34,000 but Fujairah Engineering negotiated successfully for a discount and paid only £32,000 to the dealer.

Required:

Compute the amount of taxable benefit

Answer 1

Given , Abdul Jabbar , A Mechanical Engineer at Fujairah Engineering.

Fujairah Engineering Provided Abdul Jabbar a new Petrol Car which has Listing price $34,000, but the employer paid $32,000.

According to IRS, if the car provided by the employer to the employee and is used by the employee for Office purpose only , it is not taxable . For that purpose the employee has to maintain proper records of the following

1) He has to maintain all the Bills and expenses related to maintenance of the car datewise

2) The employer should give the certificate that the car is used for office purpose only

Suppose, the car is used for both Office and Personal Purpose, the employee requires to pay the tax related to the personal purpose related expenses paid by the employer

If the Vehicle is used for personal purpose the employee is required to pay the tax at FMV of the vehicle i.e $34,000