Section A – Assets Transferred

Section B – Payments Made on Behalf of the Employee

When an employer purchases an item and then transfers it to an employee, a taxable benefit will arise if the employee does not pay the market value of the item at the date of transfer. Of course the argument starts when the taxman doesn’t agree with your market valuation – therefore always try to obtain two proofs of valuation. This can be as simple as a printout from eBay of similar items.

To assist you HMRC provide a ready reckoner for pushbike transfers: –

Age of cycle	Acceptable disposal value percentage
	Original price of the cycle less than £500	Original price £500+
1 year	18%	25%
18 months	16%	21%
2 years	13%	17%
3 years	8%	12%
4 years	3%	7%
5 years	Negligible	2%
6 years & over	Negligible	Negligible

When assets (other than cars), first applied as a benefit after 5 April 1980, are transferred by the employer to an employee (or to members of the employee’s family or household) the amount chargeable to tax on the employee is the higher of:

A. The market value of the asset at the date of transfer,

B. The market value of the asset when first applied as a benefit less any sums already taken into account in taxing benefits derived from the use of the asset.

LESS

C. Any amount paid by the employee for the acquisition of the asset.

For cars transferred the amount chargeable to tax is the second hand value of the vehicle at the date of transfer to the employee less any amount paid by the employee.