ACCA Advanced Taxation (ATX) Practice Exam

Is the use of assets taxable for job-related accommodation?

1. Yes, it incurs an additional charge

2. No, it is exempt

3. It depends on the value of the assets

4. Yes, but only if used for over a certain period

The correct answer is: Yes, it incurs an additional charge

When it comes to the use of assets for job-related accommodation, the correct assertion is that it incurs an additional charge, which aligns with the choice indicating that the use of assets is taxable. This means that if an employee is provided with an asset, such as accommodation, this can trigger tax implications, reflecting the fact that such a benefit is considered a form of income. The rationale for this taxation is based on the principle that any benefit arising from an asset provided by the employer for personal use is treated as a taxable benefit. This is an important aspect of tax legislation, as it ensures that employees are taxed on the total value of benefits received, not just on cash salary. In contrast, the idea that the use of assets could be exempt from tax does not align with the established principles in tax law regarding employee benefits. Similarly, the notion that tax liability might depend on the value of the assets does not accurately reflect tax treatment for all asset use cases, which is generally either taxable or exempt based on specific conditions rather than value alone. Lastly, suggesting that only assets used beyond a certain period would incur tax creates unnecessary complexity in understanding the general taxation rules that apply to employer-provided benefits. This reinforces the understanding that tax implications for job-related accommodation