Question 1

Section A: Objective Test

Helena is employed by a tech startup. During the 2023/24 tax year, her employer provided her with the following benefits:
1. Workplace parking at the office (cost to employer £800).
2. A mobile phone for personal and business use (cost to employer £400).
3. Medical treatment to help her return to work after an injury (cost to employer £600).
4. Gym membership at a local public leisure centre (cost to employer £500).

Which of these benefits are EXEMPT from income tax?

Accepted Answer

Review the statutory exemptions for employment benefits. Workplace parking and one mobile phone are exempt. Return-to-work medical treatment is exempt only up to £500 per year; if it exceeds this, the exemption is lost or capped depending on the specific provision (it is capped, but often tested as a strict limit). Gym memberships are taxable unless it's an in-house sports facility.

Question 2

What mistakes do candidates make on this ACCA question?

Accepted Answer

Assuming all medical treatments or health-related benefits are exempt.

How to approach this question

Full Answer

Common mistakes

Practice the full ACCA TX — Taxation Practice Exam 5

More questions from this exam