SE21700 - Benefits: computers: partial exemption: exclusion of arrangements which favour directors over other employees

Section 156A ICTA 1988

There are two sets of circumstances when the exemption in SE21697 does not apply.

• The first is where the only arrangements for making computers available are arrangements which are confined to cases of provision to directors or members of their families.
• The second is where any provision to directors or their families is on more favourable terms than any provision to employees who are not directors or their families.

Neither test is intended to be particularly restrictive. The overall purposes of the legislation include encouragement of computer provision and reducing the regulatory burden on employers. The tests should be seen as a back stop to deny relief where a company introduces arrangements that deliberately advantage the directors over other employees. Note that it is not necessary:

• that the employees and directors are provided with identical computer equipment or
• that all the employees and directors get equipment of equal value or
• that all employees are provided with computer equipment, so long as some employees who are not directors are provided with computers and the terms on which they are provided are not less favourable than the provision to directors.

Most larger employers will formally set out the terms on which equipment is supplied, either in a memorandum to the employees and directors concerned or in a staff handbook or other document which contains terms and conditions of employment. However many smaller employers may not record in writing what is expected of the employee. In such cases the terms of provision may have to be inferred from all the surrounding facts. For instance exemption will not be due if:

• directors get computers free but non-director employees make a contribution, or
• directors' families are allowed to use the computer equipment but the families of non- director employees are not or
• employees only get computers on condition that they "work at home" but no similar restriction is placed on directors.

Note that in the case of "one-man" companies, or other companies which have directors but no non-director employees, there is no group of employees with which to compare the provision to directors. So for such companies exemption cannot be denied.