ACCA Advanced Taxation (ATX) Practice Exam

What is the exempt amount for pension advice as an employment benefit per tax year?

1. £200

2. £300

3. £400

4. £500

The correct answer is: £500

The correct amount for pension advice as an employment benefit per tax year is £500. This figure aligns with the regulations regarding tax exemptions provided for employees seeking pension advice. The £500 limit allows employees to receive financial guidance on their retirement planning without incurring a tax liability on that amount. This exemption encourages employees to seek professional advice on their pension plans, which is particularly important given the complexity of retirement savings. The goal is to ensure employees are financially prepared for their retirement, thus enhancing overall financial literacy and well-being. Additionally, the amount reflects a recognition of the increasing importance of pensions in the overall financial landscape and serves to incentivize both employees and employers to engage more actively in pension planning. Understanding this benefit enables employers to communicate effectively with their employees about the resources available to them, improving employee satisfaction and engagement.