P11D - Home Broadband a Taxable Benefit?
Discussion
I can currently claim back my home broadband costs through expenses as I use it for work as well as personal use. I heard a rumour from a colleague that this could soon become a taxable benefit and appear on my P11D. This is because I'm getting the benefit of using the broadband for personal use as well as work.
Has anyone else heard this?
Has anyone else heard this?
Eric Mc said:
Do you think that might be not quite true?
Good point, the fact I'm currently chatting on Pistonheads could make it difficult for me to argue that!I guess my original question still stands. I don't mind playing Ken Dodd over a bit of free home broadband, just wondering if there were any rule changes coming up or specific current rules that made it taxable.
FWIW I think it should be classed as a benefit, I could watch 5 hours of iPlayer 'tv' all night, ebaying, doing my grocery shopping etc for free so I would call that a benefit. I guess the difficulty lies in realistically splitting the cost of business against personal use.
Well well, It would appear I'm not going to jail for fraud and tax evasion, this is a copy and paste from the HMRC website.
"However, where an Internet package, such as for Broadband access, provides unlimited access and no separate billing procedures to separate business use from private use, it is not possible for an employee to identify any specific part of the cost as relating to business use. Consequently the position for these packages is the same as for similar mobile phone packages ( EIM32945 and EIM32951). If there is no identifiable cost that is wholly and exclusively for business use, no deduction will be due."
Isn't that interesting, as company car's were many moons ago, home broadband payments can be classed as a perk of the job!
"However, where an Internet package, such as for Broadband access, provides unlimited access and no separate billing procedures to separate business use from private use, it is not possible for an employee to identify any specific part of the cost as relating to business use. Consequently the position for these packages is the same as for similar mobile phone packages ( EIM32945 and EIM32951). If there is no identifiable cost that is wholly and exclusively for business use, no deduction will be due."
Isn't that interesting, as company car's were many moons ago, home broadband payments can be classed as a perk of the job!
Charmless man said:
I can currently claim back my home broadband costs through expenses as I use it for work as well as personal use. I heard a rumour from a colleague that this could soon become a taxable benefit and appear on my P11D. This is because I'm getting the benefit of using the broadband for personal use as well as work.
Has anyone else heard this?
Get your employer to install a new line and have ADSL put on that (use it like you do now) and then its not a benefit.Has anyone else heard this?
Charmless man said:
Well well, It would appear I'm not going to jail for fraud and tax evasion, this is a copy and paste from the HMRC website.
"However, where an Internet package, such as for Broadband access, provides unlimited access and no separate billing procedures to separate business use from private use, it is not possible for an employee to identify any specific part of the cost as relating to business use. Consequently the position for these packages is the same as for similar mobile phone packages ( EIM32945 and EIM32951). If there is no identifiable cost that is wholly and exclusively for business use, no deduction will be due."
Isn't that interesting, as company car's were many moons ago, home broadband payments can be classed as a perk of the job!
What do they mean by "no deduction will be due"?"However, where an Internet package, such as for Broadband access, provides unlimited access and no separate billing procedures to separate business use from private use, it is not possible for an employee to identify any specific part of the cost as relating to business use. Consequently the position for these packages is the same as for similar mobile phone packages ( EIM32945 and EIM32951). If there is no identifiable cost that is wholly and exclusively for business use, no deduction will be due."
Isn't that interesting, as company car's were many moons ago, home broadband payments can be classed as a perk of the job!
Charmless man said:
I can currently claim back my home broadband costs through expenses as I use it for work as well as personal use. I heard a rumour from a colleague that this could soon become a taxable benefit and appear on my P11D. This is because I'm getting the benefit of using the broadband for personal use as well as work.
Has anyone else heard this?
Is the bill/broadband contract in your name and you then claim back the costs as an expense?Has anyone else heard this?
If so, i am not sure that it would ever be treated as a benefit. In this case the company are meeting your pecuniary liability which would be treated as earnings and subject to tax and Nics accordingly.
Some info here EIM00580.
I am pretty sure my home broadband has appeared on my P11D. But I don't expense it, they invoice the company directly. The taxable benefit isn't so much its worth worrying about... What goes around, comes around, theoretically many of us should all be paying the taxable benefit on all the personal usage on our company mobiles… 
Eric Mc said:
Charmless man said:
Well well, It would appear I'm not going to jail for fraud and tax evasion, this is a copy and paste from the HMRC website.
"However, where an Internet package, such as for Broadband access, provides unlimited access and no separate billing procedures to separate business use from private use, it is not possible for an employee to identify any specific part of the cost as relating to business use. Consequently the position for these packages is the same as for similar mobile phone packages ( EIM32945 and EIM32951). If there is no identifiable cost that is wholly and exclusively for business use, no deduction will be due."
Isn't that interesting, as company car's were many moons ago, home broadband payments can be classed as a perk of the job!
What do they mean by "no deduction will be due"?"However, where an Internet package, such as for Broadband access, provides unlimited access and no separate billing procedures to separate business use from private use, it is not possible for an employee to identify any specific part of the cost as relating to business use. Consequently the position for these packages is the same as for similar mobile phone packages ( EIM32945 and EIM32951). If there is no identifiable cost that is wholly and exclusively for business use, no deduction will be due."
Isn't that interesting, as company car's were many moons ago, home broadband payments can be classed as a perk of the job!
http://www.hmrc.gov.uk/paye/exb/a-z/h/homeworking....
Which states, about half way down on the page:
________________________
"You provide equipment, services and supplies for business and private use
Definitions or restrictions
You provide equipment, services or supplies to an employee who works from home. These are used for both business and private purposes.
Examples would include: a computer, office furniture, an Internet connection, pens and paper.
What to report, what to pay
For employees earning at a rate of less than £8,500 rate per year, you have:
no reporting requirements
no tax or NICs to pay
For company directors or employees earning at a rate of £8,500 or more per year:
report on form P11D – section L
pay Class 1A NICs on the value of the benefit
Work out the value to use
The value to use is the cost to you of providing the equipment, services or supplies."
________________________
This would indicate a cost should be paid?!
That doesn't explain what the word "deductions" means in the context of the original comment.
The normal rule is that an employee will be taxed on a Benefit in Kind if an employer pays directly or subsidises an expense that an employee would normally pay for out of his own pocket.
From what you are saying, it seems to immply that HMRC will NOT require an employer to REPORT a Benefit in Kind if the employer pays for an employee's broadband connection. Is that really the case.
That flies in the face of the normal HMRC approach to employers paying for services used by an employee. At the very least, they would expect that any business element of the cost of the service be hived off so that the private, non-business element can be taxed.
The normal rule is that an employee will be taxed on a Benefit in Kind if an employer pays directly or subsidises an expense that an employee would normally pay for out of his own pocket.
From what you are saying, it seems to immply that HMRC will NOT require an employer to REPORT a Benefit in Kind if the employer pays for an employee's broadband connection. Is that really the case.
That flies in the face of the normal HMRC approach to employers paying for services used by an employee. At the very least, they would expect that any business element of the cost of the service be hived off so that the private, non-business element can be taxed.
I think that the situation is as follows:-
If company pays a broadband bill in your name via an expenses claim – then it is treated as earnings and will be subject to tax/nic in the same way that earnings are.
What EM32951 is saying that where you pay personally for a broadband bill then as the marginal cost for any business cost is in effect nil then no deduction against income tax to reflect business use is due.
Where a company signs the contract for the broadband connection and pays directly then as Markda has suggested an employment related benefit would arise under Part 3 Chapter 10 ITEPA 2003. EM11522 provides further info.
(There appears to be a specific exemption in the case of the provision of 1 mobile phone to an employee)
If company pays a broadband bill in your name via an expenses claim – then it is treated as earnings and will be subject to tax/nic in the same way that earnings are.
What EM32951 is saying that where you pay personally for a broadband bill then as the marginal cost for any business cost is in effect nil then no deduction against income tax to reflect business use is due.
Where a company signs the contract for the broadband connection and pays directly then as Markda has suggested an employment related benefit would arise under Part 3 Chapter 10 ITEPA 2003. EM11522 provides further info.
(There appears to be a specific exemption in the case of the provision of 1 mobile phone to an employee)
Where an employer contracts and pays directly for a broadband line at home for you to use for work purposes there is no benefit in kind charge. This is even if there is some private use.
If you contract for broadband and the employer reimburses this, then there may be a benefit in kind charge depending on whether you already had a broadband line prior to homeworking arrangements or not. If you did not have a line at all and installed one to enable you to work at home, then this should not be considered a benefit in kind.
If you already had a broadband connection and you are now just expensing this then good luck in arguing it with HMRC.
You can also look to claim any additional costs you may have incurred since starting homeworking. For example, if you had to increase the package due to download speeds.
http://www.hmrc.gov.uk/manuals/eimanual/EIM21617.h...
If you contract for broadband and the employer reimburses this, then there may be a benefit in kind charge depending on whether you already had a broadband line prior to homeworking arrangements or not. If you did not have a line at all and installed one to enable you to work at home, then this should not be considered a benefit in kind.
If you already had a broadband connection and you are now just expensing this then good luck in arguing it with HMRC.
You can also look to claim any additional costs you may have incurred since starting homeworking. For example, if you had to increase the package due to download speeds.
http://www.hmrc.gov.uk/manuals/eimanual/EIM21617.h...
Edited by LC23 on Thursday 25th February 19:19
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