Tax treatment of computers and mobiles

August 2007

Computers and Internet Access

As long as a computer is provided by an employer to an employee for work reasons, there should be no problem with tax, even if it is used privately in the evenings and at weekends.

However if a computer is provided as an outright gift for private use it would be taxable on the employee as a benefit in kind (unless it was provided before 6 April 2006 when it would be counted as tax exempt)

The same is true of any broadband service (or any internet connection) that is provided for work from home. There should be no tax consequences, even if this includes private use, provided the private use is insignificant. It must also be ensured that any contract and additional phone lines installed to carry the connection must be in the name of the employer, not the employee.

Mobiles

Changes to the rules regarding mobile phones on 6 April 2006 had the following consequences:

Employers can provide telephones on which private calls can be made, but only one mobile per employee. To avoid complications the contract for the mobile phone and the air time contract would need to be in the name of the employer and not the employee.