Nicole Mahomes is employed as a public sector audit specialist at Canadiens LLP, a large professional services firm. Nicole lives in Newcastle-upon-Tyne (UK) but is required to make regular visits to...

Nicole Mahomes is employed as a public sector audit specialist at Canadiens LLP, a large professional services firm. Nicole lives in Newcastle-upon-Tyne (UK) but is required to make regular visits to the firm’s headquarters in London (UK).

During the tax year 2020/21, as well as a gross basic annual salary and a performance-related bonus, Canadiens LLP provided Nicole with rent-free living accommodation, a house in London for use during her visits to the firm’s headquarters. The living accommodation is non-job related.

Nicole used the house for a total of 27 days during the tax year 2020/21. Canadiens LLP acquired the property for £985,000 in 2017 and it was valued at £1,230,000 on 6 April 2020. An extension was added to the house during 2019/20. The extension cost £109,000 and was completed on 1 March 2020. The annual rateable value of the property in the tax year 2020/21 was £26,650. The official rate of interest is 2.25%.

What is the taxable accommodation benefit, if any, that will be assessable to income tax for the tax year 2020/21? Use days to calculate any period of unavailability.

A.        £3,667.38

B.        £0

C.        £1,115.49

D.        £49,577.50