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A. Assets transferred

Selling or gifting assets to an employee2:17
Selling or gifting assets to an employee
Buying assets from an employee1:49
Buying assets from an employee
2 videos, with a playing time of 3 minutes


 

Selling or gifting assets to an employee2:17

"If an asset's sold or gifted to an employee, how's it recorded?"

When the company sells or gifts an asset to an employee, it's considered a: "Benefit-in-kind"

To record selling or gifting of assets to employees:

  1. First, tap: MenuExpense claim
  2. Select the person who's being sold or given the asset.
  3. Then tap: Benefit-in-kind
  4. You can attach an image, like a receipt, or tap: Skip image
  5. Type in how much the asset is worth when you're transferring it to the employee.
  6. Optionally, you can also enter an amount in Employee deducted co-pay if you're selling the asset. Or, in other words, if the employee's paying an amount towards the asset.
  7. By default, "Arranged by" is already set to: "Company"
  8. Then tap: Next
  9. Then type a short description of the asset, and tap: Next
  10. And because it's a payroll admin who's entering it, the expense is automatically approved.
  11. Now, to see how it shows up on the person's paystub, scroll down and tap: See on paystub
  12. And when you hover your mouse over the "Benefit-in-kind" amount, you'll see the details.
  13. There may have been a co-pay, or an amount that the person's agreed can be taken off their pay. If so, you'll also see that amount showing as "Employee deducted co-pay" with its own notes when you hover.
  14. And finally, you'll know that the asset's value has been taxed by Income Tax (PAYE) correctly.

Keep in mind that:

  • The co-pay amount is automatically set to be deducted from the person's pay.
  • The company doesn't have to separately collect the co-pay amount from the person.
  • Also, a benefit-in-kind increases the employee's taxable pay, but doesn't increase the employee's in-the-hand pay.
  • However, the person still gains by receiving the non-cash asset.

To learn more:

  • About assets bought, sold or given, go to GOV.UK.

And that's it! That's everything you need to know about selling or gifting an asset to an employee!

Updated: Fri, Nov 3, 2023.
 

Buying assets from an employee1:50

"If a company buys an asset from an employee, how's it recorded?"

When the company buys an asset from an employee, the buying price of the asset is tax-free.

To record buying an asset from an employee:

  1. First, tap: MenuExpense claim
  2. Select the person who the company is buying the asset from.
  3. Then tap: Once only tax-free benefit
  4. You can attach an image, like a sale agreement, or tap: Skip image
  5. Type in how much the asset is worth when you're buying it from the employee, and tap: Next
  6. Then for "Requesting because", type a short description of the asset the company's buying, and tap: Next
  7. And because it's a payroll admin who's entering it, the expense is automatically approved.
  8. Now, to see how it shows up on the person's paystub, scroll down and tap: See on paystub
  9. And when you hover your mouse over the "Once only tax-free benefit" amount, you'll see the details.
  10. And finally, you'll know that the asset's value is being correctly paid to the employee, free of tax.

Keep in mind that:

  • If the company buys an asset from an employee for more than it's market value, the amount over the market value is taxable.
  • To record it, still do the steps above, to record the amount up to the market value.
  • And then also add a "Once only taxable benefit" expense for the amount over the market value.

To learn more:

  • About assets bought, sold or given, go to GOV.UK.

And that's it! That's everything you need to know about buying an asset from an employee!

Updated: Fri, Nov 3, 2023.

© 2020–2024 1st Money UK Holdings Ltd. All rights reserved.
www.1st.money/help/Expenses/A._Assets_transferred/