Relocation expenses and
benefits: NICs example
An employee is relocated to a new job in May 2003. The employer pays the following relocation expenses and provides the following benefits within the time limit.
|
£ |
||
|
1 |
Legal and estate agent's fees |
2,500 |
|
2 |
Removal costs |
1,000 |
|
3 |
Travel costs for visiting the new location |
500 |
|
4 |
Temporary living accommodation |
3,000 |
|
5 |
School fees for the children of the employee |
3,000 |
|
6 |
Domestic goods purchased by the employer to replace items unsuitable for use in the new home |
2,500 |
|
7 |
Landscape gardening provided by the employer |
1,500 |
|
Total |
14,000 |
NICs liability
- Class 1 NICs on item 5 (£3,000) because school fees are not an exempt removal expense
- Class 1A NICs on item 7 (£1,500) because gardening services are not an exempt removal benefit
- Class 1A NICs are also due on £1,500 because relocation expenses and benefits have been paid in excess of the prescribed £8,000 maximum
|
Total paid |
£14,000 |
|
less items 5 and 7 liable for NICs |
£4,500 |
|
less maximum |
£8,000 |
|
Excess of amount paid over exempt expenses and benefits |
£1,500 |
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