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
|
