Revised treatment of VAT on home computers | AccountingWEB

Revised treatment of VAT on home computers

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 employee’s homes; this follows withdrawal of the tax exemption which allowed employers to loan computer equipment to their employees tax free.

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allow full VAT recovery without any adjustment for private use, in circumstances where there is any business use, is withdrawn from the date of this Revenue and Customs Brief.


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Revised treatment of VAT on home computers

AnonymousUser | | Permalink

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?

carnmores's picture

its pathetic

carnmores | | Permalink

talk about red tape

Red Tape

JSJ54 | | Permalink

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?

How absolutely pathetic

dicklloyd | | Permalink

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?????

Sensible government

AnonymousUser | | Permalink

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?


Anonymous | | Permalink

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

Thanks Nicholas

JSJ54 | | Permalink

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

carnmores's picture


carnmores | | Permalink

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


JSJ54 | | Permalink

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

RebeccaBenneyworth's picture

John, it won't be that bad

RebeccaBenneyworth | | Permalink

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! ( and VAT status is based on need and not useage)

carnmores's picture


carnmores | | Permalink

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

Sorry Phil

JSJ54 | | Permalink

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