Use
of Computers
Before 6 April 2006 the first £500 of the
benefit in kind charge arising on the private use
of employer provided computer equipment was exempt
from tax. As the ‘annual value’ benefit
in kind on the use of an asset is calculated as
20% of the market value of the asset when first
used to provide the benefit, this exemption generally
covered any potential benefit in kind.
The exemption was removed from 6 April 2006 and
a computer provided after that date is therefore
potentially chargeable to benefits in kind using
the annual value calculation. However, tax legislation
exempts any benefit if there is no 'significant
private use'.
HMRC have recently revised the Employment Income
Manual to give guidance on 'not significant'. An
extract from the guidance states that:
'…where
- the employer's policy about private
use is clearly stated to the employees and sets
out the circumstances in which private use may
be made; and
- any decision of the employer
not to recover the costs of private use is a
commercial decision, for example based on the
impractical nature of doing so, rather than a
desire to reward the employee, ‘
then HMRC should accept that the test is met.
This extract makes is clear that businesses need
a written to policy to avoid the possibility of
a benefit arising. Please do get in touch if you
need any help in drafting a policy.
Internet Link:
HMRC manual
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