SE21698 - Benefits: computers: partial exemption: what computer equipment falls within the exemption

Section 156A ICTA 1988

The exemption ( SE21697) applies:

• to any computer (including "laptops") whether used partly for work purposes or wholly privately and
• to any associated equipment such as a printer, scanner, modem, data storage device or other peripheral equipment "designed to be used by being connected to or inserted into a computer" and
• to any software used on the computer
• whether the computer is provided to the employee or director themselves or to a member of their family or household.

The exemption does not extend to:

• line rental, call charges or other amounts paid in respect of a telephone used to connect the computer to the Internet or other computers in any way or
• computers provided under some arrangements which favour directors over other employees of the employer ( SE21700).

Whether an item of equipment is a computer is a question of fact. It will usually be obvious from the functions that the equipment can perform. A machine that can be used to compute will fall within the definition even if the director or employee uses it only for tasks, such as word processing or sending and receiving Emails, that involve little or no computation in the strict sense of the word. However a game playing machine (even one that works by the insertion of a disk or cartridge containing the game) is not "computer equipment" if it is not also capable of doing computations for the user.

Note that peripheral equipment must be "designed to be used by being connected to or inserted into a computer". That means that digital cameras designed for the mass photography market will not fall within the exemption, because they are designed to be used for taking photographs independently of any computer equipment. A computer may later be used to process the images recorded in the camera, and indeed the camera may function as a camera whilst attached to a computer, but that is not usually the purpose of their design. On the other hand a digital camera designed for attaching to a computer to allow video conferencing will fall within the exemption.