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:

Abdul Jabbar was also provided a free accommodation on 6 April 2018. Fujairah Engineering bought the accommodation in 2016 at the cost of £92,000 and accommodation was previously occupied by another employee of the company. The market value of the accommodation in April 2018 was £120,000. Annual value or ratable value of the accommodation is £6,000.

Required:

Compute the amount of taxable benefit

Answer 1

Given , Abdul Jabbar works as a mechanical engineer at Fujairah Engineering. Fujairah Engineering provided free accomodation to Abdul.

The Cost of Accomodation is 92,000 pounds in 2016.

It was occupied by another employee previously.

FMAV of the acomodation on april 2018 was 120,000 pounds

Annual value or Ratable value of accomodation is 6,000 Pounds

According to the taxation rules, the accomodation benefit if provided by the employer is taxable by the employee ata Annual Value.

Hence for Abdul Jabbar the amount of taxable benefit is 6,000 pounds for the accomodation provided by Fujairah engieering.