Unless a benefit is covered by a specific provision that dictates how the cash equivalent of the benefit is to be calculated, for tax purposes, the measure of a benefit provided to an employee or a director (its ‘cash equivalent’) is its cost to the employer (rather than its retail sale price for example) as calculated in accordance with the general charging provision as follows:

£

Cost to employer

x

Less: amount made good by employee

(x)

Cash equivalent value

x

Example

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