Paying Benefit in Kind on Free Use of Assets

[Catbert]

It appears that many people do not realise, or are turning a blind eye, to the new BIK rules introduced this year. This is tax evasion.

It is Revenue policy to levy BIK on personal use of work-based Internet access. It's covered in Chapter 8 of the Revenue Guide to BIK. Free Use of Assets (other than accommodation, company cars or vans)

Chapter 8 of the guide explains how you can calculate how much you owe.

This isn't a trivial benefit. There are internet cafes that provide this service, at a cost. People are quite clearly benefiting, and judging by some people's rather prolific post counts, it is not incidental.

 

[rainyday]

Hi Catbert - Now you're clutching at straws. Please provide some backup for your statement that 'Revenue policy to levy BIK on personal use of work-based Internet access'. There is no mention of Internet access in the chapter to which you refer. If you really, really believe that the general statements in this chapter cover Internet use, do you reckon they also cover bringing a pen home from work? Or making a personal call from work? Or accepting a personal call at work? Or getting a cup of coffee while at work? This is just silly scaremongering with no foundation.

If you look at [broken link removed] of the BIK guide, it provides a very generous interpretation on their policy re BIK on HOME internet connections, i.e.

Where an employer provides an employee with a home
high-speed internet connection (DSL, Broadband or
similar technology) for business purposes and the
employer bears the costs of its instillation and use, a
taxable benefit will not be treated as arising where
private use is merely incidental to the business use of
the connection.

Have you any reason to believe the policy for work-based connections is any different?

 

[Catbert]

.

The main issue was free use of assets for private use. This isn't just about the internet connection, but also the computer, connecting equipment and other ancillary assets.

a taxable benefit will not be treated as arising where private use is merely incidental to the business use of the connection.

Even for home use, they stipulate the private use as being incidental to business use. Your use clearly is not incidental.

 

[rainyday]

Re: .

The main issue was free use of assets for private use. This isn't just about the internet connection, but also the computer, connecting equipment and other ancillary assets.

The same policy applies to the computer, the connecting equipment and the other assets.

Your use clearly is not incidental.

Really! And how about your own use, Catty - or are you telling us that you are at home today as well as yesterday? Why don't you email the thread to Revenue & get an opinion from them on this topic? When I see their response, as opposed to your desperate attempts to score some petty points, I'll take this issue seriously.

 

[Catbert]

.

Really! And how about your own use, Catty - or are you telling us that you are at home today as well as yesterday? Why don't you email the thread to Revenue & get an opinion from them on this topic? When I see their response, as opposed to your desperate attempts to score some petty points, I'll take this issue seriously.

Rainyday, I'm just pointing out that you're neglecting to pay due BIK. I didn't make up these rules. What I do is irrelevent. If Bob the builder doesn't pay tax, does that entitle me not to pay tax? Is this a case of 'safety in numbers'?

Do you honestly believe your internet usage at work is purely incidental? - surely not.

(BTW, not that it matters, I'm on leave this week and am posting from home.)

 

[cullenswood]

Re: .

Have you nothing else better to do on your annual leave Catbert

 

[Catbert]

.

cullenswood - just doing some financial research. I've made a policy of not using my employer's computer equipment for private use. I decided to do this not because of BIK rules, but because of ethical reasons.

I don't intend to use up all my annual leave here!

 

[Catbert]

.

Why don't you email the thread to Revenue & get an opinion from them on this topic?

Well what do you want me to put in the email that's already not in the guide?

When I see their response, as opposed to your desperate attempts to score some petty points, I'll take this issue seriously.

I'd doubt it. You'll probably make up another excuse.

If you are implying the Revenue impose BIK for use of company computers for non-business Internet use, please provide some evidence that this actually is Revenue policy?

I provided the evidence, but it apparently wasn't good enough.


I can understand why this could be a thorny issue. It would probably mean a discussion with employers to determine the value of the benefit you are using.

 

[rainyday]

Re: .

Hi Catbert - You are presumably attempting to live up to your Dilbert character namesake's reputation for devising & implementing ludicrous & unenforceable HR policies with the sole objective of getting up employees noses. You offer no evidence that Revenue are interested in BIK in this case. It is no different to having a regular cup of tea at work, or reading the newspaper at reception each day, or making/taking a personal phone call etc etc.

PS enjoy the hols....

 

[Catbert]

.

You offer no evidence that Revenue are interested in BIK in this case.

It's in the guide. Chapter 8, free use of assets.

It is no different to having a regular cup of tea at work
The value of this benefit is less than €100, so would be exempt. (2.3 - Small benefits)

or reading the newspaper at reception each day
Provision of newspapers, periodicals etc are exempt - provided that they are generally related to the employer's business (10.22 - Provision of newspapers, periodicals etc)

or making/taking a personal phone call etc etc.
If these calls are incidental, then fair enough. Otherwise BIK would be payable.

 

[rainyday]

Re: .

It's in the guide. Chapter 8, free use of assets.

Keep on saying it often enough and you might eventually even believe it yourself. But we both know there is absolutely nothing in chapter 8 about Internet access.

The value of this benefit is less than €100, so would be exempt. (2.3 - Small benefits)

You are being selective in your quotation of the 'small benefits' rule. Don't forget the 'No more than one such benefit given to an employee in a tax year will qualify for such treatment' - What makes you think the tea is his only benefit? AAnd why can't I deem my web access to be my small benefit?

And remember the basis for calculating the BIK, i.e. "The amount assessable is the cost to the employer of Benefit-In-Kind: providing the benefit, less any amount contributed to the employer by the employee. "

Given that Internet bandwidth is paid for by my employer on a fixed capacity basis (e.g. a 2 Mb link, regardless of the usage of AAM), there is no incremental cost to my employer of my usage - how would you suggest that this notional benefit is assessed?

 

[Catbert]

.

Keep on saying it often enough and you might eventually even believe it yourself. But we both know there is absolutely nothing in chapter 8 about Internet access.

This is about two issues, free use of assets and internet access. You yourself have posted an exerpt from chapter 10, regarding private use of company internet access.

What makes you think the tea is his only benefit?

Tea is a trivial benefit. If you really want to get picky, 10.3 - meal and meal vouchers would cover it.

And why can't I deem my web access to be my small benefit?

Because it's not a small benefit. You are moderating a finance forum from your place of work. How much time does that take? There are people making a living out of internet cafes, providing this service.

The amount assessable is the cost to the employer of Benefit-In-Kind: providing the benefit, less any amount contributed to the employer by the employee. "

Given that Internet bandwidth is paid for by my employer on a fixed capacity basis (e.g. a 2 Mb link, regardless of the usage of AAM), there is no incremental cost to my employer of my usage - how would you suggest that this notional benefit is assessed?

Are you suggesting that your internet access costs your employer nothing? I doubt this is the case. Maybe if people in your company only used the internet for business use, your employer would only need a 1Mb link. Here's a suggestion as to how to calculate your BIK:

Free use of fixed assets:
How much does it cost for your employer to provide you with equipment and support for your time moderating askaboutmoney?

(time you are on AAM/total time at work) * cost of providing assets = annual value of use of assets.

you would have to pay BIK on 5% of the annual value of the use of assets.

Here's a practical example from the guide:

An employer provides a computer, printer and ancillary equipment to an employee for private use at home.
The employer retains ownership of the equipment. The original cost of the equipment to the employer was €3,000. The equipment is first provided to an employee for home use on 1 January 2004 when it has
a market value of €2,500. The notional pay of the employee for the year 2004 (and subsequent years) arising from the private use of the equipment is €2,500 x 5% = €125 (€2.40 per week / €10.41 per month).

Private use of business internet access:
In a similar fashion, work out how much your internet access costs your employer (Hint: it's not free)

 

[rainyday]

Re: .

Life is too short to play these games. We all know that this is not an issue. There is no incremental cost to my employer. Any calculation based on time is fundamentally flawed, as bandwidth is the issue, not time. Comparisons to the costs of running internet cafes are of no relevance as that would include insurance costs, heating costs, software licencing costs, pc hardware costs. Bandwidth requirements arising from my use of AAM is absolutely incidental in the context of the overall bandwidth requirements.

You can keep teasing as you wish, Catbert - but I'm not going to take the bait anymore.

 

[TheTrollsTroll]

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R/Day. I guess Catbert is hoping to get a job as a Revenue Troll.

Of course they are much more subtle than this

 

[Catbert]

.

Is life also too short to pay import duty and income tax?

You obviously don't believe me, and don't want to believe the revenue guide, so maybe you should email them. Otherwise we're just going to keep going round in circles.

I would suggest emailing them from an anonymous email account and not to mention AAM. We wouldn't want to attract any unwelcome audits or attention.

Here's a suggestion, if I may be so bold:

Sir or Madam,

I have a query on the new BIK rules. I spend (X) hours per week using my employer's computer equipment and office space for private use. I also have use of a high-speed internet connection. Please could you tell me if I'm liable to pay tax on this benefit?

Thanks for your help

Rainyday.

(fill in the 'X' with the number of hours you spend moderating AAM, at your place of work. A best estimate will suffice)

 

[pdiddy]

re

Give it a rest cat. Your argument is trite and makes no sense. Stop trolling and trying to have a meaningless dig at rd and go do something with your holidays. This is not only boring, but also meaningless.

 

[rainyday]

Re: .

R/Day. I guess Catbert is hoping to get a job as a Revenue Troll.

I'd be very, very surprised if he had anything to do with Revenue. No-one in Revenue would have even attempted this.

 

[Tommy]

Re: .

I'm now closing this thread as it appears to have run its course.