By Tolley in association with Philip Rutherford

The following Employment Tax guidance note by Tolley in association with Philip Rutherford provides comprehensive and up to date tax information covering:

  • Broadband
  • Introduction
  • Business only use ― exemption from tax
  • Private use
  • Interaction between broadband and telephone


Employers may provide broadband access to employees as part of homeworking arrangements. The provision of broadband is very similar to the provision of other telephony equipment or services by an employer to an employee (see the Telephones guidance note).

The key considerations are what is the broadband used for, whether business, personal or combined, who pays for the broadband and who has the contract with the provider.

Business only use ― exemption from tax

Where an employer provides an employee with broadband access at the employee’s home and it is solely for business purposes then there are no tax or reporting consequences under ITEPA 2003, s 316. The exemption applies where the employer pays for the service, and:

  • there is a business need for the employee to be provided with the phone and it is key to the performance of his duties
  • the employer ensures there is insignificant private use
  • the benefit is not a reward to the employee

HMRC’s opinion on this is given at EIM21617.

The exemption from tax also applies where the employee does not have significant private use. The term ‘not significant private use’ is explained by HMRC in EIM21613 as:

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