"If a company provides an asset for an employee's personal use, how's it recorded?"
When your company provides an asset for an employee's personal use, it's considered a "Benefit-in-kind". HMRC recommends to take 20% of the asset's value, and set it up as a repeating "Benefit-in-kind", spread over five years.
To add an asset provided by a company, for an employee's personal use, as a repeating "Benefit-in-kind":
- First, select the person who's getting personal use of the company provided asset on: MenuPeople
- To make a new repeat payable, go to: PayPay settings
- And scroll down to the "Repeat payables ... personal" heading.
- Then click: New repeat payable
- Next, select: Benefit-in-kind
- Next, type in a Description of the benefit-in-kind.
- Select the yearly time frame: Amount type
- And then type in 20% of the asset's value as the yearly payment value, spread over five years: Amount
- By default, "Arranged by" is already set to: "Company"
- Then scroll down and click the "Advanced" heading.
- Optionally, if there's a co-pay, or a yearly amount that the person's agreed can be taken off their pay, enter that also in: Employee deducted co-pay
- And then to set the repeat payable to end in exactly five years, in Ends on (optional), click Set to today, and then click in to manually change the date, and add five years to it.
- Then click: Save
- Then on the repeat payable list, hover your mouse over the repeat payable, and click the "See on paystub" button:
- You'll now see an amount showing under: "Benefits in kind ... company arranged"
- And if you hover your mouse over the amount, you'll see a breakdown of the calculation.
- 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.
- Then if you click the "Next paystub" circle, you'll see the same amounts repeated on every payday. Including "Benefit-in-kind" and: "Employee deducted co-pay" (repeated for the next five years)
- If you later decide you want to remove, or stop the repeating "Benefit-in-kind", click its "Edit" button:
- And finally, you can change any part of it, including changing the "Ends on" date to finish earlier, if required.
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 person's tax, and doesn't increase the person's in-the-hand pay.
- However, the person still gains by receiving use of the non-cash asset.
To learn more:
- About working out the value of assets made available to an employee, go to GOV.UK.
And that's it! That's all you need to do to add an asset for an employee's personal use!