Reply to: Broadband through the business

[TheCyclingProgrammer]

I don't even know how you begin to divvy up percentage used for broadband. Is it time spent using, or total bandwidth? What about my light bulb thats connected to my wifi? That's connected 100% of the time all day every day. Doe that count as personal use?

The point is you don’t need to divvy it up.

If it’s in the business name, then see my arguments already made in this thread.

If it’s in your name you can’t claim anything.

[SeanT]

What about my light bulb thats connected to my wifi? That's connected 100% of the time all day every day. Doe that count as personal use?

Is it in the room you use as an office 85% of the time?

[l35kee]

I don't even know how you begin to divvy up percentage used for broadband. Is it time spent using, or total bandwidth? What about my light bulb thats connected to my wifi? That's connected 100% of the time all day every day. Doe that count as personal use?

[Zylon]

@TheCyclingProgrammer - good points. I thought you were suggesting the sections quoted directly in your original post supported the 'not significant' definition - which I still don't think they do. However, now I've read the HMRC link in full, and in particular their examples, I would completely agree with you on this one.

[WordIsBond]

So clear cut you had to tell us 4 times?

LOL. No idea how that happened. Maybe a mod will clean it up?

[northernladuk]

So clear cut you had to tell us 4 times?

[WordIsBond]

TCP, I'm doing exactly what you are talking about here, and I have for several years now.

For me, it might be even more clear-cut. I WFH 100%, but also have anywhere from 2-4 others working here on any particular day. So I'm providing business broadband for 3-5 users daily. The fact that we allow its use for personal use, both for other employees while they are here and for my bride and I because it is our home, is really incidental. Personal use is easily less than 20% of total use.

[WordIsBond]

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[WordIsBond]

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[WordIsBond]

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[TheCyclingProgrammer]

Where did you come across that interpretation of 'not significant'?

Firstly, as mentioned in my first post:

“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,

That's a fairly broad and open definition for starters.

Secondly:

The “not significant” condition should not be decided purely on the absolute time spent on different uses of the equipment or services provided. It should be considered in the context of the employee’s duties and the necessity for the employee to have the equipment or services provided in order to carry out the duties of the employment.

All from: https://www.gov.uk/hmrc-internal-man...anual/eim21613

It is absolutely essential for me to have a fast and reliable internet connection to do my job. I cannot do my job without it, just the same as my laptop.

See the "management consultant" example for further demonstration of this principle.

By that logic, for example, almost any car purchases/leased through the business should be exempt from BIK because it's essential for the contractor to do their job. I recently read that HMRC are even considering levying BIK on undercover police officers vehicles.

No, because vehicles are not covered by this rule anyway. The rule under discussion ("supplies and services provided other than on an employer's premises") is covered by Section 316 IETPA 2003, outlined here:

https://www.gov.uk/hmrc-internal-man...anual/eim21611

And as that link explains, certain things are excluded from this exemption, including any motor vehicle (also the construction of any building which is why I decided not to fund my garden office through the business in the end):

https://www.gov.uk/hmrc-internal-man...anual/eim21612

Edit: I agree about laptop and phone - but IMO those and a few others are exceptions, established by convention.

They aren't exceptions or conventions, laptops are explicitly covered by the above rule (not phones though, which are covered by a separate rule), along with other typical office equipment and furniture.

As I said, the same rule covers pretty much every piece of equipment, office furniture or work-related service I use. If I'm happy for my business to pay for my laptop, my garden office furniture, stationary and other equipment (e.g. printers, monitors etc.) then I'm equally happy for it to pay for a business broadband service. The fact that I'm able to (and do) make personal use of most of these things to varying degrees is incidental to the fact that they are needed first and foremost by my business so I can do my job.

[Zylon]

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.

Where did you come across that interpretation of 'not significant'? I don't think the links you provide support it and I've be very surprised if you could stretch it to that. By that logic, for example, almost any car purchases/leased through the business should be exempt from BIK because it's essential for the contractor to do their job. I recently read that HMRC are even considering levying BIK on undercover police officers vehicles.

However, I do think other people have presented some good reasons you could justify it. I just don't think the significant argument could be used that way.

Edit: I agree about laptop and phone - but IMO those and a few others are exceptions, established by convention.

[TheCyclingProgrammer]

Just in case anyone was interested themselves, its worth picking up the phone to their business advisors.

My personal SIM contract doesn't end until end of Feb and it would cost me about £36 to buy out the contract. I have the option of waiting until then to take up a Virgin business SIM plan (same £15/month) and getting £5 discount on the broadband from that point, or I can sign up now and they've offered me two months mobile free, worth £30 + the extra £15 I'd save on the broadband, so its probably worth cancelling early.

Bottom line £50/month all in for fibre and mobile.

[TheCyclingProgrammer]

So my accountant has got back to me and thinks it should be fine. He confirmed my understanding that the contract must be in the business name and where personal use is not significant, there should be no BIK.

Based on the business benefits (SLA, no throttling, better support etc.) and the fact I mostly work from home I think its justifiable and my accountant also thinks, if it were ever queried, that we'd have an "excellent chance" of arguing no BIK, so if he is happy I'm happy.

It looks like Virgin have some good business SIM plans too which gets you £5 off their second tier fibre plan (so £35/month for 350+Mb down and 10Mb up and 24 hour SLA) so I might finally move my mobile over to the business as well (I've been with Three on a personally paid SIM for years).

[pr1]

Is it 50%? You use it for 8 hours a day for business. The rest of the family use it for much more than that evenings and weekends? They are streaming and other data intensive reasons so usage is nowhere near 50% either? You are gonna have a job defending that figure even if it's true aren't you? Is it worth it?

If someone is "voluntarily" paying 50% BIK on their business broadband you think HMRC are gonna bother pushing for another 10,20,30%? No way