Reply to: CCTV at my home

[LisaContractorUmbrella]

He says "dedicated home office when it was converted from an attached disused dairy and knocked through"

Just testing BB

[BoredBloke]

If you have a self-contained office which is used purely for businesses purposes and is separate from the main residence and you want a security alarm on that I would have thought that may be a different issue and you could, more successfully perhaps, argue your case

He says "dedicated home office when it was converted from an attached disused dairy and knocked through"

[LisaContractorUmbrella]

I believe it can be a singular employee out of all the employees (which may be 1). cf company stationary, pens, computers. One man band, do these suddenly become dis-allowable because they happen to be located at the location the employee often works?

So, I don't think it fails on these grounds.

Incidentally I had no problems with claiming the capital costs (additional) of large windows, radiators etc in the dedicated home office when it was converted from an attached disused dairy and knocked through. Ditto blinds and some other bits and pieces. Whether this gives rise to a CGT issue etc is a different question, though the advice I received was that it didn't.

I also put through some things which I though were dubious (and I have a high threshold!). e.g. damp treatment, treatment related to the fact that it had contained cattle and was therefore urine infested and salted. I thought this was pushing it but my accountant (fairly aggressive was of the view it was legitimate - I though it was improving the fabric of the building). Again no significant problems in the ensuing inspection.

What it comes back to is the duality of purpose issue. It succeeds or fails on this. I don't dispute there is duality of purpose. The question is whether or not there is enough of this to make the claim fail - i.e. is the intrinsic beneficial use obtained by the OP more than incidental.

You won't find much help in the HMRC guidance in my view. Though there have been a number of cases none of them have really centered around (as far as I can tell) the provision of long term assets which happen to also benefit the employee.

Sure if one is risk averse leave it alone. If not weigh up the benefit of successful claim against cost of failed claim, give it a bash and hope for the best.

If you have a self-contained office which is used purely for businesses purposes and is separate from the main residence and you want a security alarm on that I would have thought that may be a different issue and you could, more successfully perhaps, argue your case

[ASB]

I believe it can be a singular employee out of all the employees (which may be 1). cf company stationary, pens, computers. One man band, do these suddenly become dis-allowable because they happen to be located at the location the employee often works?

So, I don't think it fails on these grounds.

Incidentally I had no problems with claiming the capital costs (additional) of large windows, radiators etc in the dedicated home office when it was converted from an attached disused dairy and knocked through. Ditto blinds and some other bits and pieces. Whether this gives rise to a CGT issue etc is a different question, though the advice I received was that it didn't.

I also put through some things which I though were dubious (and I have a high threshold!). e.g. damp treatment, treatment related to the fact that it had contained cattle and was therefore urine infested and salted. I thought this was pushing it but my accountant (fairly aggressive was of the view it was legitimate - I though it was improving the fabric of the building). Again no significant problems in the ensuing inspection.

What it comes back to is the duality of purpose issue. It succeeds or fails on this. I don't dispute there is duality of purpose. The question is whether or not there is enough of this to make the claim fail - i.e. is the intrinsic beneficial use obtained by the OP more than incidental.

You won't find much help in the HMRC guidance in my view. Though there have been a number of cases none of them have really centered around (as far as I can tell) the provision of long term assets which happen to also benefit the employee.

Sure if one is risk averse leave it alone. If not weigh up the benefit of successful claim against cost of failed claim, give it a bash and hope for the best.

[northernladuk]

If investigated how would they translate 'made available to employees'? In this case there is only one but would they not translate this in to being available for other employees should there be any?

I am really struggling with the concept that something that is fastened to and kept locked in a private residence can be available for all employees. If this were the case then it is just open to abuse. Why doesn't the director get his double glazing paid for as one of the windows lets light in to the office or get his boiler paid for by the company as one of the radiators is in the office and so on. These items are just as unportable as a secure CCTV and alarm system.

Also if you do claim this doesn't this give HMRC free access to your property to investigate if need be?

I merely offer the guidance to the OP as an indication that might prove a way forward if he still believes it's reasonable for the company to make the purchase.

Indeed and it is a very interesting discussion. Am not trying to beat you down, just discuss the technicalities. Having a slow day hence the time to think far too much about it

[ASB]

Even if the guidance is correct you have say £30K of personal stuff and a couple of hundred £K house value and a business set up at £4 a week and a few hundred quid of business equipment. Splitting the charge proportionally (properly) will come back with a ludicrously small amount which will do nothing but alert the investigator to the issue.

I don't think apportioning cost on value protected is necessarily appropriate (though it might be). Certainly Clare etc will have much more practical experience of what the local HMIT might feel when investigating.

However, in my last full investigation myco had bought a couple of grands worth of safe. It had some not inexpensive cabinetry. HMIT wanted to check it's existance properties (fair enough).

In terms of value of the contents it held a substantial amount of my stuff. The only business stuff it contained was media. The actual contents of this were held just for convenience - owned by customers.

In effect HMIT accepted that the personal use was merely incidental and therefore didn't automatically fail wholly and exclusively on the basis of duality of purpose.

I merely offer the guidance to the OP as an indication that might prove a way forward if he still believes it's reasonable for the company to make the purchase.

[ASB]

Isn't that Cart before Horse though? You're not making an asset available for an employee to use - they are choosing to have a security system fitted, for which there's no extra cost because of the business

I do see that argument. And it may indeed prove to be correct. However, the point I made earlier was that the company chooses to install the security system, to protect its own valuable property. This is now a company asset.

This asset is made available to the employee simply as a by product of providing the safeguards for the companys valuable assets. This use is incidental (and if HMIT actually agreed that there would be no BIK).

If it is decided that this is an asset placed at the employees use it is simultaneously used by the business, as such the bik is proportionately reduced. In essense even if it is bik'ed it might work out cheaper overall to take the bik hit over the systems useful life until such point it's written down to a fairly nominal value and possibly then sold onto the individual.

[northernladuk]

I'm not sure why everybody seems to be complete discount this guidance.

HM Revenue & Customs: Assets - made available to an employee

I thought it had to be available to all employees to be covered by this. All the examples given in further reading are not screwed to the owners house with the main parts being inside the owners house with no access to other employees. There is the fact there isn't any other employees but it is still not available for use to them should they exist?

Even if the guidance is correct you have say £30K of personal stuff and a couple of hundred £K house value and a business set up at £4 a week and a few hundred quid of business equipment. Splitting the charge proportionally (properly) will come back with a ludicrously small amount which will do nothing but alert the investigator to the issue.

At that point won't you have to prove the percentage by providing receipts for equipment, business insurance to cover it? Popping up with paperwork to prove you claimed the PC on your personal insurance opens a different can of worms. Worth it?? Not for me.

[Clare@InTouch]

I'm not sure why everybody seems to be complete discount this guidance.

HM Revenue & Customs: Assets - made available to an employee

Isn't that Cart before Horse though? You're not making an asset available for an employee to use - they are choosing to have a security system fitted, for which there's no extra cost because of the business - and then trying to claim partial business use. The whole cost would have been incurred by the employee regardless.

I think it's entirely different than an employee making use of a company camera, when it can be withdrawn at any time, as opposed to something that cannot actually by physically taken away. It's not therefore an employee use of company asset, but rather business use of an employee asset. On that note, you could charge the company a fee if there's any extra cost to you in providing the surveillance!

[ASB]

I'm not sure why everybody seems to be complete discount this guidance.

HM Revenue & Customs: Assets - made available to an employee

Assets made available for private-only use or mixed business and private use
Definitions or restrictions
You make an asset available to an employee for private-only use or for mixed business and private use.
What to report, what to pay
For employees earning at a rate less than £8,500 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
There are two steps to working out the value to use:
1. Take the greater of
the asset’s annual value (20 per cent of it’s market value when you first provided it as an employee benefit)
any annual rental or hire charges you pay for it
2. Add any other amounts you have spent during the tax year on making the asset available – such as any running costs you’ve covered.
You should reduce the value proportionately if either of the following applies:
you made the asset available to more than one employee during the tax year
you used the asset directly for your business during the year in some other way than making it available to your employee
The rules for assets outlined in this guide don’t apply to cars, vans or living accommodation. Go to ‘More useful links’ at the end of the page for more information on these topics.

[LisaContractorUmbrella]

Typical HMRC bolluxs then! If it is protecting assets owned by both parties then why is it that the second party cannot make a reasonable contribution.

How would you work out how much of the cost price of the alarm can be attributed to the protection of the company assets and how much to protecting all the other stuff in the house?

[BoredBloke]

Nope. Wholly and exclusively or nothing.

Typical HMRC bolluxs then! If it is protecting assets owned by both parties then why is it that the second party cannot make a reasonable contribution.

[Clare@InTouch]

Nope. Wholly and exclusively or nothing.

Agreed. The total cost of the alarm is £X, and that doesn't change whether it's protecting your business assets in addition to your home or not. If there was an extra £Y incurred wholly and exclusively to also protect the business kit, and it wouldn't have been incurred if it wasn't for the business kit, then I could see logic in claiming £Y.

But otherwise no - there's no incremental additional cost caused by business use.

[northernladuk]

Surely there should be some proportion of the cost that could be charged. If the busuiness is registered at the address and the address gets turned over the business will lose some of its assets. So while the security system does have a duality of purpose, part if it is in protecting the company kit - it only seems fair that a proportion of the cost can ge charged to the business - perhaps on the basis of what proportion of the house is given over to business use.

Nope. Wholly and exclusively or nothing.

[MyUserName]

Is there any chance of partial company reclaim of cost, as is protecting some expensive company kit?

Hopeful I know, but thought I would ask.

Having an alarm fitted too.

Is anything in the house that belongs to you rather than the company?
If so, the alarm is not purely for business use.