Home computers - taxable benefit?

This year’s budget announced that the employee tax exemption for computers provided by employers for private use (The Home Computing Initiative) was going to be dropped.

What does this mean for the tax position of employers and employees? If there is any ’significant’ private use of an employers provided computer then more paperwork is required in the form of P11Ds. A consequence of this is that employers will need to maintain additional records in order to establish whether significant private use has been made of such a computer.

We are still waiting for guidance from HMRC as to what is significant; all they will say at the moment is:

“Section 316 of the Income Tax (Earnings & Pensions) Act 2003 provides that no income tax will arise on accommodation, supplies and services used in employment duties. This includes computer equipment provided for business purposes where any private use made is not significant. Consequently where employers provide computer equipment to employees solely for them to carry out the duties of the employment at home, HM Revenue and Customs accept it is unlikely that private use of the computer will be significant, when compared with the primary business purpose of providing the computer equipment.”

We will let you know if and when further guidance is published.