The following Employment Tax guidance note by Tolley in association with Philip Rutherford provides comprehensive and up to date tax information covering:
Most employers provide their employees with the necessary office accommodation, tools and equipment to carry out the duties of their employment. Workplace accommodation is generally exempt from tax. In the majority of cases, whether the tools are provided directly or allowances are given to the employee, there is a general exemption from tax and NIC. There may be reporting requirements if the employee has significant private use.
There is a general exemption from tax and reporting for equipment and tools provided by an employer to an employee within ITEPA 2003, s 316. The exemption is in place so long as:
HMRC’s guidance can be found at EIM21610.
The exemption from tax / NIC and reporting extends to the provision of tools beyond the employer’s premises as long as further requirements are met. These include:
HMRC’s guidance is found at EIM21611 onwards.
If employees are provided with tools and they can be used for private use, each case should be examined on its merits. As long as the private use is not significant then no tax charge should arise. Not significant use is not defined but HMRC provides some guidance at EIM21613 that:
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