November 2006

Benefits in Kind on Private Use of Computer Equipment

The Finance Act 2006 abolished the £500 tax exemption for the private use of computer equipment provided by an employer to an employee. This removed a tax-free incentive by which employers had been able to offer their employees tax-free home use of computer and related equipment such as scanners and printers. The reason for the withdrawal of the incentive was that some employers had been using the exemption to provide their employees with packages including MP3 players and games consoles.

HMRC have now updated their guidance on what they regard as insignificant private use by an employee and the circumstances under which a taxable benefit in kind would arise on the use of computers and related equipment.

They have also included guidance on the provision by employers to employees of home internet access.

Internet Links:

HMRC guidance on insignificant private use and
HMRC guidance on internet costs