General rule

If an employer provides an employee with goods or services, the employee is chargeable on their money's worth. This is normally the second hand value of the goods or services, less any amount the employee reimburses the employer.

In some cases the second hand value may be less than the cost to the employer, or the employee may not be able legally to turn the goods or services into money (for example wines and spirits). In these cases the general rule would not charge all of the cost to the employer in providing the benefit to the employee.

Special rules

There are special rules to deal with this. They ensure that for new assets the chargeable amount is always at least the cost to the employer.

Assets transferred from an employee at overvalue

There is also a chargeable benefit for assets transferred from an employee at overvalue.

Level 3 Table of Contents