I've never put the costs of broadband through the business - despite it being essential for my business - because it has always been in my name and therefore isn't claimable.
I'm now seriously considering binning my Sky broadband and landline and getting Virgin fibre. Their business packages are a lot better value, even before considering the VAT saving. I'm currently paying £39/month for basic line rental and 38Mbps /10Mbps unlimited DSL and the basic Virgin business package is £30 + VAT/month for 350+Mbps/7Mbps.
Because this would be in the business name, then my understanding is that this is fully tax deductible without incurring a BIK so long as "private use" is not significant. "Not significant" in this case is the same rule that applies to any other assets or services supplied by MyCo for my use (e.g. a laptop) - i.e. it's not about how much time is spent on business/personal use but more about how important it is to do my job.
From https://www.gov.uk/hmrc-internal-man...anual/eim21617
On what constitutes significant private use, suitably vague from HMRC as usual, but:
https://www.gov.uk/hmrc-internal-man...anual/eim21613
From what I can tell this would be absolutely fine. It's clear that I cannot do my job without a broadband connection. There will obviously be private use, but on the basis of the above I think it's reasonable to say it's not significant.
The only question mark is on whether or not any VAT reclaim should be apportioned, though as we're only talking about £72/year in VAT it's probably not a big concern.
Yes I plan to ask my accountant, I was just wondering if anyone else did this?
I'm now seriously considering binning my Sky broadband and landline and getting Virgin fibre. Their business packages are a lot better value, even before considering the VAT saving. I'm currently paying £39/month for basic line rental and 38Mbps /10Mbps unlimited DSL and the basic Virgin business package is £30 + VAT/month for 350+Mbps/7Mbps.
Because this would be in the business name, then my understanding is that this is fully tax deductible without incurring a BIK so long as "private use" is not significant. "Not significant" in this case is the same rule that applies to any other assets or services supplied by MyCo for my use (e.g. a laptop) - i.e. it's not about how much time is spent on business/personal use but more about how important it is to do my job.
From https://www.gov.uk/hmrc-internal-man...anual/eim21617
Section 316 (see EIM21610) exempts from tax assets or services provided by an employer in the employee’s home solely for work purposes, as long as any private use is not significant (see EIM21613).
Where an employer provides for Internet access at the employee’s home solely for work purposes, under a package where there is no separate billing or record of access calls, and no breakdown is possible between work and private calls, we accept that where private use is not significant (and private use does not affect the cost of the package) the costs of connection are exempt from tax under Section 316.
Where an employer provides for Internet access at the employee’s home solely for work purposes, under a package where there is no separate billing or record of access calls, and no breakdown is possible between work and private calls, we accept that where private use is not significant (and private use does not affect the cost of the package) the costs of connection are exempt from tax under Section 316.
https://www.gov.uk/hmrc-internal-man...anual/eim21613
“Not significant” is not defined in statute. However where:
the employer’s policy about private use is clearly stated to the employees and sets out the circumstances in which private use may be made (this may include making the conditions clear in employment contracts or asking employees to sign a statement acknowledging company policy on what use is allowed and any disciplinary consequences if this policy is not followed), and
any decision of the employer not to recover the costs of private use is a commercial decision, for example based on the impractical nature of doing so, rather than a desire to reward the employee,
the employer’s policy about private use is clearly stated to the employees and sets out the circumstances in which private use may be made (this may include making the conditions clear in employment contracts or asking employees to sign a statement acknowledging company policy on what use is allowed and any disciplinary consequences if this policy is not followed), and
any decision of the employer not to recover the costs of private use is a commercial decision, for example based on the impractical nature of doing so, rather than a desire to reward the employee,
The only question mark is on whether or not any VAT reclaim should be apportioned, though as we're only talking about £72/year in VAT it's probably not a big concern.
Yes I plan to ask my accountant, I was just wondering if anyone else did this?
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