SE21605 - Particular benefits: accommodation, supplies and services: ‘not significant’ private use

Section 155ZA(2) and (3)(b) ICTA 1988

The exemption for work related accommodation, supplies and services ( SE21601 and SE21602) applies only if use for private purposes ( SE21604) is ‘not significant’.

‘Not significant’ is not statutorily defined. Provided that

• the employer’s policy about private use is clearly stated to the employees and sets out the circumstances in which occasional private use may be made and
• any decision of the employer not to recover the costs of private use is a commercial decision because the administrative costs of doing so would exceed the amounts involved, rather than a desire to reward the employee and
• there are reasonable checks to ensure that the employer’s policy is followed in practice

you should accept that the test is met.

In other circumstances, whether private use is not significant will depend on all the circumstances of the case. Do not spend time arguing the point where only trivial amounts are involved.

Employers are not expected to keep detailed records of every instance of actual private use in order to substantiate a claim for exemption.

See SE21608 regarding the provision of a telephone line in the employee’s home.