Is computer allowable for tax?

arsenalboy

I am sure this question has been asked many times on this board but cannot locate similar question.

My daughter is a graphic designer and has landed a job working from home. She has been provided with powerful software to do her job which does not run on normal home computers due to the memory and processing requirements. She has purchased a laptop costing circa £1000, aware that her employer would not reimburse it.

I told her she should be able to claim the cost and reduce her tax. She is employed and not self employed.

When she goes on the Income Tax section of Gov.Uk it takes her through a simple yes/no exercise and tells her it is not deductible.

Surely it should be allowable because it was a wholly and necessary expense to enable her to do her job?

Appreciate any views/advice please.

Thanks.

penners324

Yes but the employer really should be reimbursing her or even providing their own.

This must breach so many security protocols.... or doesn't the employer care?

arsenalboy

penners324 said:

Yes but the employer really should be reimbursing her or even providing their own.

This must breach so many security protocols.... or doesn't the employer care?

Okay, can you comment on the process to claim when Gov.Uk blocks it?

Pennywise

Does the contract of employment explicitly require the employee to buy such a computer?

MalMonroe

arsenalboy said:

penners324 said:

Yes but the employer really should be reimbursing her or even providing their own.

This must breach so many security protocols.... or doesn't the employer care?

Okay, can you comment on the process to claim when Gov.Uk blocks it?

Hi

I doubt that gov.uk will be able to help in this instance.

As penners324 said above, the employer should be reimbursing her, or providing her with equipment that she can use for her job. 

(And also, there is that valid concern about security.)

Your daughter needs to speak to her employer, or the HR department at her work, providing receipts for any equipment she has bought to enable her to do her job for them at home.

She should really have done that before actually agreeing to take on the work as now she's out of pocket. But if the software won't run on any old computer, she had no choice. This is the point she needs to push with the employer.

acas has some good information about working from home and necessary equipment in the following link -

https://www.acas.org.uk/managing-staff-who-work-from-home/expenses-and-equipment

There's also a link within that link that takes you to the gov.uk site

It might be worth your daughter making a phone call to acas as well, to find out if she's entitled to anything. 

As she appears to have agreed to purchase the computer in advance though, things may be difficult but that doesn't mean to say that all is lost.

DE_612183

It's only a tax deductible expense if she is self employed or working through her own ltd company.

He company should provide her with the tools to do her job.

A postman can't claim tax relief for the shoes he wears, but the royal mail may well provide footware.

arsenalboy

Thanks for all the comments.

My daughter was in need of the employment and went into it with eyes wide open.

It really is the simple question of whether she can set the cost against her income tax and the process for doing it.

Jeremy535897

Go to https://www.gov.uk/tax-relief-for-employees (I am treating you rather than your daughter as the claimant for ease).

The answers should be straightforward until you get to the page "select all the expenses you want to claim". If you check the "buying other equipment" box, you are told that you have to claim capital allowances, or check the box described as "other expenses" (clearly the small tools etc claim is not relevant). Then you go past the 5 job screen and it says you are eligible to claim.

The technical analysis is quite complex. If the computer is treated as an expense, it must be incurred wholly, exclusively and necessarily for the purposes of the employment. It is a well established fact that making claims for something that puts you in the position of being able to do the employment is not allowable. The most common example of this is taking a course that you have to pass to be allowed to do the job, but you can see how the same analysis might apply to the computer in your case.

You will recall that the online claim said that you may be able to claim capital allowances on a computer that you must use for business. In view of what I have pointed out above, this may be the only route that could work. You can study the HMRC view on the topic here:
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim36730

Unfortunately I think the only way for an employee to claim capital allowances is to complete a self assessment tax return for all income including form SA102 (employment).

arsenalboy

Jeremy535897 said:

Go to https://www.gov.uk/tax-relief-for-employees (I am treating you rather than your daughter as the claimant for ease).

The answers should be straightforward until you get to the page "select all the expenses you want to claim". If you check the "buying other equipment" box, you are told that you have to claim capital allowances, or check the box described as "other expenses" (clearly the small tools etc claim is not relevant). Then you go past the 5 job screen and it says you are eligible to claim.

The technical analysis is quite complex. If the computer is treated as an expense, it must be incurred wholly, exclusively and necessarily for the purposes of the employment. It is a well established fact that making claims for something that puts you in the position of being able to do the employment is not allowable. The most common example of this is taking a course that you have to pass to be allowed to do the job, but you can see how the same analysis might apply to the computer in your case.

You will recall that the online claim said that you may be able to claim capital allowances on a computer that you must use for business. In view of what I have pointed out above, this may be the only route that could work. You can study the HMRC view on the topic here:
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim36730

Unfortunately I think the only way for an employee to claim capital allowances is to complete a self assessment tax return for all income including form SA102 (employment).

Thank you, very helpful and informative, as were other responses.

DullGreyGuy

Jeremy535897 said:
If you check the "buying other equipment" box, you are told that you have to claim capital allowances, or check the box described as "other expenses" (clearly the small tools etc claim is not relevant). Then you go past the 5 job screen and it says you are eligible to claim.

Interestingly if you tick more than one box, eg other equipement and other expenses, it says you are eligible to claim rather than saying you can for some and not others.

Whilst the driver for purchasing the laptop is the job I would highly suspect she'll be using it outside of the job too which also then throws doubt on the ability to offset its cost as its not exclusively a business tool.

Jeremy535897

DullGreyGuy said:

Jeremy535897 said:
If you check the "buying other equipment" box, you are told that you have to claim capital allowances, or check the box described as "other expenses" (clearly the small tools etc claim is not relevant). Then you go past the 5 job screen and it says you are eligible to claim.

Interestingly if you tick more than one box, eg other equipement and other expenses, it says you are eligible to claim rather than saying you can for some and not others.

Whilst the driver for purchasing the laptop is the job I would highly suspect she'll be using it outside of the job too which also then throws doubt on the ability to offset its cost as its not exclusively a business tool.

It doesn't have to be exclusively used for business, although HMRC is of the view that unless the personal use is quite small, that is likely to cause the claim to fail. Where there is private usage, only the business proportion may be claimed:
https://www.gov.uk/hmrc-internal-manuals/employment-income-manual/eim36570