In this section:
- Providing employee expenses and benefits: an overview
- Schemes that reduce expenses and benefits paperwork
- Expenses and benefits A to Z
Assets - made available to an employee
This guide provides an overview of your tax and National Insurance contributions (NICs) obligations if you make an asset available for use by an employee. The rules in this area are complex. To go direct to more detailed information, choose the link below to ‘Technical guidance’.
The term ‘asset’ covers a wide range of items that you might make available to an employee. Examples include computers and televisions.
Different rules apply if you transfer the ownership of an asset to an employee rather than just making it available to them. See the separate A to Z entry on ‘Assets – bought, sold or given’.
Note that the rules in this guide don’t apply to cars, vans or living accommodation that you make available to an employee. Choose ‘More useful links’ below to find information on these topics.
On this page:
- Assets made available for business-only use
- Assets made available for private-only use or mixed business and private use
- Understanding the £8,500 threshold
- More useful links
- Technical guidance
Assets made available for business-only use
Definitions or restrictions
You make an asset available to an employee for business-only use.
What to report, what to pay
For employees earning at a rate less than £8,500 per year, you have:
- no reporting requirements
- no tax or NICs to pay
Unless you have a dispensation covering this item or one of the exceptions listed in the ‘Exceptions’ section below applies, then for company directors or employees earning at a rate of £8,500 or more per year:
- report on form P11D – section L
- you have no tax or NICs to pay
How a dispensation can reduce your expenses and benefits reporting
Work out the value to use
There are two steps to working out the value to use:
1. Take the greater of
- the asset’s annual value (20 per cent of its market value when you first provided it as an employee benefit)
- any annual rental or hire charges you pay for it
2. Add any other amounts you have spent during the tax year on making the asset available – such as any running costs you’ve covered.
You should reduce the value proportionately if either of the following applies:
- you made the asset available to more than one employee during the tax year
- you used the asset directly for your business during the year in some other way than making it available to your employee
Exceptions
You have no reporting requirements and no tax or NICs to pay for directors or employees earning at a rate of £8,500 or more per year if the asset you’re making available is:
- office equipment or supplies provided on your premises for your employees to use when doing their jobs
- office equipment or supplies provided for business-only use elsewhere (such as in the home of an employee who works from home)
These exceptions can still apply even if there is an insignificant amount of private use by the employee.
The rules for assets outlined in this guide don’t apply to cars, vans or living accommodation that you make available to an employee. Go to ‘More useful links’ at the end of the page for more information on these topics.
Assets made available for private-only use or mixed business and private use
Definitions or restrictions
You make an asset available to an employee for private-only use or for mixed business and private use.
What to report, what to pay
For employees earning at a rate less than £8,500 per year, you have:
- no reporting requirements
- no tax or NICs to pay
For company directors or employees earning at a rate of £8,500 or more per year:
- report on form P11D – section L
- pay Class 1A NICs on the value of the benefit
Work out the value to use
There are two steps to working out the value to use:
1. Take the greater of
- the asset’s annual value (20 per cent of it’s market value when you first provided it as an employee benefit)
- any annual rental or hire charges you pay for it
2. Add any other amounts you have spent during the tax year on making the asset available – such as any running costs you’ve covered.
You should reduce the value proportionately if either of the following applies:
- you made the asset available to more than one employee during the tax year
- you used the asset directly for your business during the year in some other way than making it available to your employee
The rules for assets outlined in this guide don’t apply to cars, vans or living accommodation. Go to ‘More useful links’ at the end of the page for more information on these topics.
Understanding the £8,500 threshold
To check what's included in the £8,500 threshold for P11D reporting purposes, follow the link below.
More useful links
Technical guidance
EIM21630: Assets placed at the disposal of a director or employee
