WFM UK | Payroll UK: BIK Module - Assets Transferred (Cars, Property, Goods or Other Assets)

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Overview

Assets Transferred covers situations where an employer sells, gives, or acquires assets in connection with an employee, including cars, property, goods, or other items of value. This benefit type is inherently event-driven, with different tax and National Insurance outcomes depending on the nature of the transaction. Within the BIK module, Assets Transferred is handled through two distinct Event Types, each with its own legislative treatment and payroll behaviour.

Important: 

• GOV.UK Guidance - Expenses and benefits: assets bought, sold or given. Do not confuse Assets Transferred with Assets Placed at Employee Disposal (or made available to the employee)
• Consider if the benefit being applied is a Trivial Benefit, there may be no Income Tax or National Insurance Liability due

This article explains how these events should be applied with BIK module considerations and how to calculate the benefit value. See below for some other articles to assist with preparing and processing benefits in the BIK module:

• For creating this benefit type at company level, go to Configuring Company Benefits
• For applying benefits to employee records, go to Applying Benefits to Employees: Manual & Data Imports
• For how this looks in Payroll when processing, go to How Payrolled Benefits are Reflected in Payroll
• For National Insurance and Best Practices, please read the National Insurance and Income Tax Handling for Payrolled Benefits article

Contents

• BIK Module Configurations and Considerations
• Event Type: Selling or giving away an asset to an employee
  • Working out the Taxable Amount
    • Giving or selling a new asset to an employee
    • Giving or selling a used or depreciated asset to an employee
    • Giving or selling an asset previously made available as a benefit
• Event Type: Buying an asset from an employee
  • Working out the Taxable Amount

BIK Module Configuration and Considerations

Assets Transferred is technically treated as a one-off event, not a time-based benefit held over a period of time (Such as a Health plan/medical benefit). The full taxable value arises at the point of transfer and should not be reduced based on duration.

Please Note: If the benefit is a Trivial Benefit but you still wish to record this in the BIK module, then consider using the "Other" Benefit type, also selecting the event type that attracts no Income Tax or National Insurance Liability. See here for more information: BIK Module - Other Items

Company-Level Configuration

When configuring this benefit at company level: 

• Set the benefit to retain until the end of the tax year for leavers to ensure the taxable value is always fully applied

• Since this is a single transaction, do not configure pro-rating based on duration of employment

Employee-Level Configuration

When configuring this benefit at employee level, within the current version of the BIK module, Benefit Start and Benefit Stop dates are used to calculate pro-rated values. While this logic is appropriate for ongoing benefits, it does not automatically align with the treatment of one-off events.

• Enter the full value of the payment as the benefit value

• Set the Benefit Start and Benefit Stop dates to the full tax year to avoid incorrect pro-rating

With this configuration, even if the employee leaves, the full taxable value of the payment will be taxed correctly.

Ongoing Enhancements

The current release of the BIK module fully supports compliant processing of this benefit type for income tax purposes. While certain behaviours, such as date-based pro-rating, require deliberate configuration for this benefit type, the correct legislative outcome can be achieved through the setup approach outlined above.

Employers can therefore operate this benefit accurately by applying the prescribed configuration.

Future enhancement phases will further refine benefit-specific behaviour to reduce manual intervention, increase automation, and more closely reflect the distinct legislative treatment of one-off benefit events such as Assets Transferred.

Event Type: Selling or giving away an asset to an employee

Selling or giving away an asset to an employee is one of two Event Types supported and defined under the Assets Transferred benefit type.

This Event Type records the transfer of an asset from the employer to the employee where the taxable value is treated as a benefit. The benefit, thus taxable value, is the difference between the value of the asset minus the amount paid for it by the employee (subject to further conditions where provided as a benefit beforehand).

The taxable amount is payrolled for income tax across the tax year, with employer-only Class 1A National Insurance due at year-end via P11D(b):

Working out the Taxable Amount

To work out the taxable value, or the "Cash Equivalent", first attain the value of the asset itself:

Giving or selling a new asset to an employee

If Giving or selling a new asset to an employee, and the value of the asset was £10,000 when purchased new, then the value to start with is £10,000 (the higher of the two). The employee pays the employer £3,000 for the asset. 

The calculation to use for the sake of the taxable amount (Cash Equivalent) is as follows: 

£10,000
(Value of the asset when purchased by the Employer)

minus

£3,000
(Amount paid by the employee for the asset)

equals

£7,000
£7,000 is the taxable amount (or Cash Equivalent) to apply to the employee as a benefit.

Giving or selling a used or depreciated asset to an employee

If giving or selling a used or depreciated asset to an employee, and the value of the asset was £5,000 when purchased new, but second-hand it is worth £2,000, then the value to start with is £2,000. The employee pays the employer £800 for the asset.

The calculation to use for the sake of the taxable amount (Cash Equivalent) is as follows: 

£2,000
(Second-hand or depreciated value of the asset)

minus

£800
(Amount paid by the employee for the asset)

equals

£1,200
£1,200 is the taxable amount (or Cash Equivalent) to apply to the employee as a benefit.

Giving or selling an asset previously made available as a benefit

If giving or selling an asset previously made available as a benefit, and the value of the asset was £20,000 when first provided as a benefit to the employee but the second hand value it is worth £15,000, then the value to start with is £20,000 (unless it is an asset listed as an exception, in which case use the second hand value). The employee had an asset benefit value of £4,000 taxed before being sold the asset, which they then bought for £12,000.

Please Note: Where an asset is first provided as a benefit and later purchased by the employee, any reduction to the taxable value only applies if both events occur in the same tax year. Benefit amounts taxed in a previous tax year are not offset against the value when the asset is purchased in a later tax year. For further information, a GOV.UK Manual example is available here.

The calculation to use for the sake of the taxable amount (Cash Equivalent) is as follows: 

£20,000
(Value of the asset when first provided as a benefit (not an exception))

minus

£4,000
(Amount already taxed as a benefit in the tax year)

minus

£12,000
(Amount paid by the employee for the asset)

equals

£4,000
£4,000 is the taxable amount (or Cash Equivalent) to apply to the employee as a benefit.

Event Type: Buying an asset from an employee

Buying an asset from an employee is the second of two Event Types supported and defined under the Assets Transferred benefit type.

This Event Type records the employer’s purchase of an asset from an employee, but only any excess paid over market value, which is treated as taxable earnings, meaning a benefit in kind arises. No benefit in kind applies where the purchase price does not exceed market value.

The taxable amount is taxed in full in the next available payroll run, with both employer and employee Class 1 National Insurance calculated and payable immediately also:

Because this benefit and event type attract Class 1 National Insurance, please read this article on processing Class 1 National Insurance and best practices.

Working out the Taxable Amount

Buy an asset from an employee

More simply, the value to use is the amount the employer pays over the asset’s market value. The market value is determined at the time of the transaction, not the amount the employee paid for it. The asset being second-hand, or depreciated, is to be considered. For example, if a brand new laptop is £1,200 but the market dictates that a second-hand one is £800, then £800 is the amount to start with.

If buying an asset from an employee, and the market value of the asset (new or second-hand) was £800 when purchased by the employer, and the employer purchased it for £1,200, then the calculation to use for the sake of the taxable amount (Cash Equivalent) is as follows: 

£1,200
(Amount asset purchased for by the Employer)

minus

£800
(Market Value at the time of transaction)

equals

£400
£400 is the amount paid over market price by the employer and is the taxable amount (or Cash Equivalent) to apply to the employee as a benefit.

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