Taxable benefit charge - returning office equipment

14 June 2021

At the start of the pandemic, thousands of employees were forced to work from home, something that a large majority were not initially equipped to do. As well as employers rushing to purchase IT equipment, such as laptops and mobile phones, they also supplied or reimbursed equipment such as office chairs and desks to enable a home working set up for their employees.

In light of the pandemic, HMRC made a temporary exemption to employer provided equipment and reimbursed equipment regulations which meant that no benefit charge would arise if equipment was provided, or the cost of equipment was reimbursed whereby it was purchased solely due to having to work from home because of the pandemic. Exemptions under these conditions are in place until 5 April 2022.

Employers are reminded, however, that a benefit charge would arise if the office equipment purchased by the employer is not returned by the employee and instead its ownership is transferred to the employee.

The June issue of the employer bulletin highlighted that:

If you have supplied your employees with office equipment to allow them to work from home, without a transfer of ownership, there is no tax charge when they return the equipment back to you. If you transfer the ownership of the equipment to the employee at any stage of their employment, a benefit charge generally arises on the market value of the equipment at the time of the transfer less any amount made good by the employee. There is an alternative method for calculating the chargeable benefit when equipment is transferred, more information on this method can be found in Employment Income Manual EIM21650

Many employers may have not taken this into consideration and have advised employees that they need not return the equipment they have been provided with. The statement in the bulletin highlights that if this is the case, then a taxable benefit charge will be applied on the market value of the equipment.

Those employees who purchased the equipment themselves however will not need to return the equipment to avoid a benefit charge. The exemption still allows purchases to be none taxable if they were purchased due to having to work from home due to the pandemic.

This has also been highlighted within the June employer bulletin:

“If your employee has agreed to purchase their own home office equipment for use whilst working at home as a result of coronavirus and you reimburse the exact expense, unless you have specified to your employee that they must transfer ownership to you, the ownership of the equipment rests with your employee.

There is no benefit charge on the reimbursement. There is also no benefit charge if you allow your employee to keep the equipment as it is something that they already own. Further information and to check which expenses are taxable if your employee works from home due to coronavirus is available.”




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