Working from home - another benefit?
Following the removal of the tax exemption for the loan of computer equipment by employers to employees (Home Computer Initiative (“HCI”)), HMRC have issued Business Brief 55/2007 which sets out the revised VAT policy in relation to computers provided by employers to employees who work from home.
Previously HMRC had been happy to accept that any private use of such computers could be ignored and that full VAT recovery was allowed. However, with effect from 15/8/07, HMRC will look for evidence that it is “necessary” for the employer to provide the computer in the first place. If this evidence is not available, then an apportionment of input tax will be required to reflect any private use element. It may be possible to agree a fixed percentage with HMRC.
Businesses providing computers under an existing HCI agreement can continue to reclaim full VAT until the agreement has expired (normally 3 years).
In practice, would a business provide a computer to employees unless it was necessary for them to carry out their duties? And how do you monitor the level of private use? Therefore, it seems that the best approach would be to argue that any private use is insignificant and should continue to be ignored.
Date: 22nd October, 2007
Articles from this Author
20th July, 2010
Potential good news for Charities - VAT
22nd June, 2010
Emergency Budget 2010 - VAT
18th June, 2010
Holiday homes - VAT refund scheme for DIY housebuilders
15th June, 2010
Charity Advertising - ‘Pay-Per-Click’ services (PPC)
Contact Business Service Partners
Choose from the drop down menu below to select a Partner to contact.
Mercer & Hole’s Robert Jamieson wins a Lifetime Achievement Award at the Tolley’s Taxation Awards 2018… twitter.com/i/web/status/9…
For the latest Mercer & Hole news, visit our LinkedIn page mercer-&-hole