ExpertMedium2 marksMultiple Choice
ACCA · Question 04 · Income tax and national insurance contributions
Section A
'NovaTech Ltd', a tech startup, provides the following benefits to its employees:
- A workplace nursery located on the company's premises.
- Mobile phones (one per employee) registered in the company's name.
- Subsidized meals in the staff canteen, available to all staff.
- Gym memberships at a local public leisure centre.
Which of these benefits are EXEMPT from income tax for the employees?
Section A
'NovaTech Ltd', a tech startup, provides the following benefits to its employees:
- A workplace nursery located on the company's premises.
- Mobile phones (one per employee) registered in the company's name.
- Subsidized meals in the staff canteen, available to all staff.
- Gym memberships at a local public leisure centre.
Which of these benefits are EXEMPT from income tax for the employees?
Answer options:
A.
1 and 2 only
B.
1, 2, and 3 only
C.
2, 3, and 4 only
D.
1, 3, and 4 only
How to approach this question
Review the statutory exemptions for employment benefits. Check the conditions for nurseries, mobile phones, canteens, and recreational facilities.
Full Answer
B.1, 2, and 3 only✓ Correct
Workplace nurseries (on-site), one mobile phone provided to an employee, and subsidized meals in a canteen available to all staff are all statutory exempt benefits. A gym membership at a local public leisure centre is a taxable benefit (only in-house sports facilities are exempt).
Common mistakes
Assuming all health/fitness benefits are exempt.
Practice the full ACCA TX — Taxation Practice Exam 3
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