Expenses and benefits: computers loaned to an employee

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1. Overview

As an employer loaning computers to your employees, you have certain National Insurance and reporting obligations.

If you loaned a computer to an employee before 6 April 2006 and this arrangement is still in place, different rules may apply - read technical guidance from HMRC.

2. What's exempt

You don’t have to report or pay anything to HMRC if the computer is provided for work purposes and the employee doesn’t make significant private use of it.

Salary sacrifice arrangements

You do have to report the computer if it’s part of a salary sacrifice arrangement.

3. What to report and pay

If the computers you loan to employees aren’t exempt, you must report them to HM Revenue and Customs (HMRC) and pay National Insurance.

Computers available for private use

You must:

• report it on form P11D
• pay Class 1A National Insurance on the value of the benefit

4. Work out the value

If you need to report and pay National Insurance on the benefit, work out the value by following these steps:

1. Calculate 20% of the greater of either the computer’s market value at the time you provided it, or any rental charge you pay for it.

2. Add any running costs that you cover.

3. Take away any amount that your employee contributes to cost of the loan.

Salary sacrifice arrangements

If the cost of the computer is less than the amount of salary given up, report the salary amount instead.

These rules don’t apply to arrangements made before 6 April 2017 - check when the rules will change.

5. Technical guidance

The following guides contain more detailed information:

• the meaning of ‘not significant use for private purposes’

• cash equivalent of assets placed at the disposal of a director or employee

• computers - partial exemption abolished 2006/07