Home Internet connection = taxable BIK?

Home Internet connection = taxable BIK?

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We have an employee who is responsible for updating our website with sports results/information. Obviously this necessitates her updating the site from home in the evenings and at weekends. We are going to pay for a broadband connection at her house - installation and rent.
What are the tax implications? Should we get the bill addressed to the Company? Does it make a difference that she already has a dial up connection (which is too slow for her work use)?
Any help will be much appreciated.
Neil Whiteside

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By NeilW
13th Apr 2005 13:22

No charge - potentially
No charge if:

(i) The company contracts for the Broadband service at the employees home.

(ii) It is provided solely for business use, with little or no private use.

If the company provides a connection or other facilites and there is significant private use, then the line is taxable as a BIK, and subject to class 1A National Insurance (but not employees NI).

What you mustn't do is reimburse a broadband service the employee has contracted for. That would probably be taxable as salary.

NeilW

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