In the last budget, the Chancellor announced that the tax exemption on the benefit in kind arising on computers made available by employers for private use by their employees (for computers up to £2,500 incl. VAT) would be removed with effect from 6 April 2006.

Since that announcement there has been considerable speculation about the impact this change would have on computers provided for business purposes where some private use is also made. However, this has now been clarified.

There will be no tax charge on computer equipment provided for business purposes where any private use made is not significant. They say that where employers provide computer equipment to employees solely for them to carry out the duties of the employment at home, HMRC accept it is unlikely that private use of the computer will be significant, when compared with the primary business purpose of providing the computer equipment.

Full details of the announcement can be seen at http://www.hmrc.gov.uk/news/home-computer2.htm

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