ACCA Advanced Taxation (ATX) Practice Exam

What is the maximum amount of medical treatment considered an exempt employment benefit?

1. £250 per employee per tax year

2. £500 per employee per tax year

3. £1,000 per employee per tax year

4. £2,000 per employee per tax year

The correct answer is: £500 per employee per tax year

The correct amount of exempt medical treatment considered an employment benefit is £500 per employee per tax year. This exemption allows employers to provide certain medical treatments without the benefits being subject to tax. This exemption applies to a range of medical treatments, including injuries sustained in the course of employment, as well as other health-related expenses that improve the overall well-being of employees. By staying within this limit, employers can ensure that they are offering valuable support to their employees while adhering to tax regulations. The lesser figures might represent lower thresholds that do not apply to the broad spectrum of medical expenses covered under this exemption, while larger amounts exceed the threshold set by tax authorities. Thus, understanding this limit is crucial for employers looking to implement a benefits scheme that maximizes employee welfare while managing tax liabilities effectively.