The employee's salary is £15,000 a year.
The employee is entitled to a deduction of £800 for expenses within Section 336 ITEPA 2003 (see EIM31620 onwards).
In the year the employer paid £1,650 for heating, lighting and internal decorations of the job- related accommodation (exempt under Section 99 or 100 ITEPA 2003 (see EIM11331) but the employee reimburses the employer £350 of this expenditure. So the net cost to the employer was £1,300 (£1,650 - £350).
The employment income will be:
|less deductible expenses||800|
|Heating, lighting and internal decorations:|
|10 per cent of £14,200 = 1,420, less “made good” £350 = £1070|
|£1,070 is less than the net cost of £1,300||1,070|