Expenses and benefits: assets bought, sold or given

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1. Overview

As an employer buying, selling or giving assets to your employees, you have certain tax, National Insurance and reporting obligations.

What鈥檚 included

Assets can include:

  • computers
  • televisions
  • cars
  • bicycles

If you let your employee use an asset that you own, you should see the guide for assets made available.

2. What to report and pay

What you have to deduct, pay and report to HM Revenues and Customs (HMRC) depends on what you did with the asset, for example, whether you bought it, sold it or gave it away.

Selling or giving away an asset

You must:

Buying an asset

If you buy an asset from an employee for more than its market value, the premium you鈥檝e paid counts as earnings, so:

  • add it to your employee鈥檚 other earnings
  • deduct and pay PAYE tax and Class 1 National Insurance through payroll

3. Work out the value

Give or sell a new asset to an employee

The value is the higher of:

  • how much the asset is worth second-hand when you transfer it
  • how much you bought the asset for

Give or sell a used or depreciated asset (not previously made available as a benefit)

The value is how much the asset is worth second-hand when you transfer it.

Give or sell a used asset that you鈥檝e previously made available as a benefit

The value is the higher of:

  • how much the asset is worth second-hand when you transfer it
  • how much the asset is worth when you first provided it as a benefit, minus any amount that was subject to tax or National Insurance while you were providing it as a benefit

of how this works.

Exceptions for assets previously available as a benefit

The value is calculated differently for:

  • cars
  • vans
  • bicycles or cyclists鈥� safety equipment
  • living accommodation
  • computer equipment that you made available for private use when a limited exemption for computers was in force (until 6 April 2006)

The value to use is how much the asset is worth second-hand when you transfer it.

Buy an asset from an employee

The value to use is the amount you pay over the asset鈥檚 market value.

Salary sacrifice arrangements

If the cost of asset is less than the amount of salary given up, report the salary amount instead.

These rules do not apply to arrangements made before 6 April 2017 - check when the rules will change.

4. Technical guidance

The following guide contains more detailed information: