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VAT implications for using computers at home

In the past when a computer was provided for any employee at home, full VAT recovery was allowed provided some business use was made. However with immediate effect this policy has been revised.

To determine the amount of VAT that can be claimed a business must now be able to demonstrate why the employee is being provided with a computer for use at home.

If the use of the computer is primarily for the employee to carry out work related to his employment then full VAT can be recovered without any requirement to account for VAT on private use.

If it cannot be shown that the provision of a computer was necessary for employment duties to be carried out, then only a portion of VAT incurred is recoverable as input tax. It may also be possible to have a set percentage agreed with HMRC based on a representative period.

For those businesses that are still under an existing Home Computer Initiative agreement full VAT recovery can continue until the expiry of same.

Visit or call 0870 26 77 118 for more information.

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