The scrapping in the Finance Act 2007 of the rule which allowed computer equipment worth up to £2500 to be supplied to employees without an assessable benefit in kind arising has created an unintentional potential tax trap for businesses which supply their employees with BlackBerrys and similar PDA type devices.
The issue arises because the legislation will now create a benefit in kind charge for any device which is designed to be used with, connected to or inserted into a computer.
There is an exemption from the charge where it has been provided in order to make it possible for the employee to carry out their duties of employment. However, if excessive private use of the device is made, a benefit in kind might well be charged.
We can expect PAYE inspectors to look for such use. Having a policy which prohibits non-essential private use of handheld devices is recommended.
The issue arises because the legislation will now create a benefit in kind charge for any device which is designed to be used with, connected to or inserted into a computer.
There is an exemption from the charge where it has been provided in order to make it possible for the employee to carry out their duties of employment. However, if excessive private use of the device is made, a benefit in kind might well be charged.
We can expect PAYE inspectors to look for such use. Having a policy which prohibits non-essential private use of handheld devices is recommended.