Revised treatment of VAT on home computers

Kashflow logo
12

HM Revenue and Customs have published revised guidance via a 'Revenue and Customs Brief' on the VAT treatment of computers made available by employers for use in their employees homes; this follows withdrawal of the tax exemption which allowed employers to loan computer equipment to their employees tax free.

HMRCs revised policy

HMRCs policy to allow full VAT recovery without any adjustment for private use, in circumstances where there is any business use, is withdrawn from the date of this Revenue and Customs Brief.

With immediate effect businesses must consider why the computer is being provided to the employee to determine the level of VAT that can be claimed. Businesses will only be able to claim full VAT recovery without any requirement to account for VAT on any private use (subje...

Please Login or Register to read the full article

The full article is available to registered AccountingWEB.co.uk members only. To read the rest of this article you’ll need to login or register. Registration is FREE and allows you to view all content, ask questions, comment and much more.

Share this content

Replies

Please login or register to join the discussion.

avatar
20th Aug 2007 17:04

Revised treatment of VAT on home computers
Does this include Blackberries and PDA's which are now deemed as PC's and as such the voice traffic that is carried on it?

Thanks (0)
avatar
16th Aug 2007 17:15

its pathetic
talk about red tape

Thanks (0)
avatar
By JSJ54
18th Aug 2007 09:29

Red Tape
Isn't this yet another example of legislation for the sheer hell of it & a part of the Conservatives' £14bn tax savings.

Typically Labour claims "the proposals show the (Conservative)party is lurching back to the right ........."

Well you wouldn't want to upset your comrades in the public sector would you?

Thanks (0)
avatar
17th Aug 2007 19:30

How absolutely pathetic
I wholeheartedly agree with Nicholas Myles - it is so pathetic - what a complete waste of public money.

Who on earth decided to use scarce resources to investigate this non-subject. They need to be sacked !!!!

Surely this guidance could have been issued within 5 minutes, not 16 months !!!

Was guidance needed in any case?????

Thanks (0)
avatar
23rd Aug 2007 10:29

Sensible government
the government had a policy of encouraging increased computer useage. that has been achieved so now they do not need to give tax breaks on home computers any more. (except where needed for business) So what is the problem?

Thanks (0)
avatar
By Anonymous
21st Aug 2007 12:11

Neil
Please refer back to this site in about October 2008 for the policy on Blackberries and PDAs.

Thanks (0)
avatar
By JSJ54
24th Aug 2007 11:23

Thanks Nicholas
I'm still waiting for Phil Wood's reply though.

Thanks (0)
avatar
19th Aug 2007 16:40

John
why employ someone to fill it in when they never stop digging - woops another idea for the New New Deal - or as it should be called trash recycling

Thanks (0)
avatar
By JSJ54
23rd Aug 2007 13:25

Phil
please tell me what I did wrong (?) to receive your comment.

Thanks (0)
avatar
24th Aug 2007 15:50

John, it won't be that bad
In deciding whether to compute a benefit in kind on a computer with private use the manuals (Employment Income Manual) state that you look at the reason the computer was provided. (See EIM 21613 and following paras) If it was necessary for the employee to have a computer to do his job and the computer was provided to meet that need, then there is no BIK and also no VAT adjustment. Employers atre not expected to monitor the hours of use etc in that case.

If the employee does not need a computer for work, but is provided with one in any event and uses it privately then he is taxable on it and the VAT is blocked. Here is where the problems come, but in essence I would then be asking for agreement on a percentage across the board, from HMRC which I would use for BIK and VAT.

I do, however, agree that it makes your heart sink when you read stuff like this - I know it's all technically sound, but oh dear, it makes you realise that civil servants are rather "special" people and their minds don't work the same as the rest of the world. In other words, get a blinking life, guys.

By the way the stuff about Blackberry's etc is at EIM 21701. On the whole the modern ones are treated as computers and not phones. So see above! (i.e.tax and VAT status is based on need and not useage)

Thanks (0)
avatar
23rd Aug 2007 19:18

Stuart
I did not see any criticism of you there only the gove - so keep up the contributions

Thanks (0)
avatar
By JSJ54
24th Aug 2007 20:42

Sorry Phil
for misunderstanding what you were saying. Thanks for the reply.

Thanks (0)