Electronic devices policy

When removing the Home Computer Initiative back in 2006, HMRC accidentally opened the door to charging tax on private use of any electronic device, such as a laptop or tablet, provided to employees by their company. How can you prevent a tax charge from arising?

Computer-related equipment

Tablets and laptops come within the normal rules for computers. HMRC’s guidance says that for computers provided to employees by their company to be exempt from benefit-in-kind charges, “the sole reason the computer must have been provided must be for the individual to carry out their duties of employment” and that private use must be insignificant.

This means the company must be buying the iPad or laptop principally for business purposes, and that it’s required for you or your employee to be able to perform their duties. Greater productivity when commuting, note taking in meetings and performing presentations are all likely to be accepted as valid business reasons.

The definition of insignificant private use can be more problematic however, the latest guidance from HMRC is that the level of an employee’s private usage of computer-related equipment provided by their company will not be the deciding factor in whether or not a tax charge arises. If it’s made available in order to carry out their duties in the first place, then they are unlikely to be taxed on its private use. So to be able to prove this to HMRC it’s best to have an Electronic Devices Policy governing the issue (and private use) of each device.