07.09.2007

Free computers for staff - tax changes. Sponsoring employees through university?

Welcome to Scott-Moncrieff's Business Alert, designed to help you keep up-to-date with business and tax legislation. If you need additional information or have any concerns regarding any of issues below please contact us and we will be happy to discuss the implications for your business.
 

FREE COMPUTERS FOR STAFF
The provision of a free computer for staff to use privately (normally in the employee?s home) used to be exempt from benefit in kind tax. This changed from 6 April 2006, when the exemption from benefit in kind ended. All computers provided for employee?s to use privately are now taxable as a benefit. HMRC have now reviewed the recovery of VAT on these computers, and decided that the VAT should be partially or fully blocked, to take account of the private use of the computer. If the machine is purely for private use, then no VAT should be recovered on its purchase, and for partial private use, if this is taxable on the employee then the VAT should be similarly blocked. The change has immediate effect.

NIL PAYMENT NOTIFICATIONS
Businesses due to make a payment which is in the event nil normally have to send in a nil payslip to notify the tax authority. Otherwise the debt management process can commence quite quickly, necessitating a letter or telephone call to resolve the situation. The debt management telephone lines are very busy, and this entire cycle can be frustrating for businesses. HMRC have now set up an online facility for businesses (or their authorised tax agents) to notify a nil payment for either corporation tax or PAYE. This should speed up this administrative task considerably.

SPONSORING EMPLOYEES THROUGH UNIVERSITY?
Business which second employees into full time education for one or more years can pay the individual a bursary while they are pursuing their course of study. Provided the payment does not exceed the limit in the legislation, it is free of both tax and NIC. The payment during the secondment can be treated separately from any wages that the member of staff is paid for work done during vacations, etc which is taxed as normal. The limit of pay for the secondment has been increased to £15,480 for the 2007-08 academic year, that is commencing 1 September 2007.

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We believe the information in this Business Alert to be correct at the time it was sent, but cannot accept any responsibility for any loss occasioned to any person as a result of action or refraining from action as a result of any item herein.