When calculating living accommodation benefits if the employer owns the property, what happens if the property cost was above £75k?

When calculating living accommodation benefits, if the employer owns the property and the cost exceeded £75,000, the procedure involves assessing the value of the benefit provided. For properties valued above this threshold, you calculate a specified interest rate on the excess amount above £75,000. This approach establishes a taxable benefit that reflects the value of the accommodation provided to the employee.

The methodology is based on the principle that benefits provided by an employer should be reflected accurately, and it incorporates the notion that a certain level of value—for the first £75,000—is exempt from being taxed. Thus, the focus turns to how much value beyond this threshold must be considered for tax purposes. By applying an interest rate to the cost exceeding £75,000, the calculation aligns with tax regulations that stipulate taxable benefits should fairly represent the economic benefit derived by the employee.

It's important to note that while the annual value or initial value of the property might have implications in other contexts, they do not directly apply when the cost of the property exceeds the specified amount. Hence, the focus shifts solely to the calculations that account for the excess value over £75,000 for determining the taxable accommodation benefit.