Cyber Tax loophole for Laptops

SHREWD BOSSES are profiting from a legitimate tax loophole that allows them to promote staff loyalty while avoiding the expense of cash bonuses.

Generous employers can reward their employees with valuable computer equipment for private use without incurring expensive PAYE and National Insurance costs or passing on the burden of employee National Insurance.

The employer retains the title to the goods, and classifies them as being ’on loan’, thus bypassing the rules on conventional gifts and bonuses.

Roy Maugham, tax partner at UHY Hacker Young said the scheme only applies to computer equipment:

Laptops are becoming a popular cost-efficient employee benefit. An employer who buys a 2,000 laptop as a perk for a member of staff to use for work and as a perk can reclaim the VAT of 297.87 Furthermore, the employee receiving the equipment avoids both National Insurance charges of 220 and an income tax bill of up to 800, assuming it is returned to the employer within five years.

Annual bonuses are proven to encourage staff loyalty and performance. In this way they can offer even more value for money, added Mr Maugham.