Expenses and benefits: computers loaned to an employee
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1. Overview
As an employer loaning computers to your employees, you have certain National Insurance and reporting obligations.
If you loaned a computer to an employee before 6 April 2006 and this arrangement is still in place, different rules may apply - read from HMRC.
2. What's exempt
You don鈥檛 have to report or pay anything to HMRC if the computer is provided for work purposes and the employee doesn鈥檛 make significant private use of it.
Salary sacrifice arrangements
You do have to report the computer if it鈥檚 part of a salary sacrifice arrangement.
3. What to report and pay
If the computers you loan to employees aren鈥檛 exempt, you must report them to HM Revenue and Customs (HMRC) and pay National Insurance.
Computers available for private use
You must:
- report it on form P11D
- pay Class 1A National Insurance on the value of the benefit
4. Work out the value
If you need to report and pay National Insurance on the benefit, work out the value by following these steps:
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Calculate 20% of the greater of either the computer鈥檚 market value at the time you provided it, or any rental charge you pay for it.
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Add any running costs that you cover.
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Take away any amount that your employee contributes to cost of the loan.
Salary sacrifice arrangements
If the cost of the computer is less than the amount of salary given up, report the salary amount instead.
These rules don鈥檛 apply to arrangements made before 6 April 2017 - check when the rules will change.
5. Technical guidance
The following guides contain more detailed information: