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-------------------------------------------------------------- This story was printed from ZDNet Australia. --------------------------------------------------------------
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Will your Xmas bonus be a laptop? By Will Sturgeon, silicon.com November 17, 2004 URL: http://www.zdnet.com.au/jobs/news_trends/soa/Will-your-Xmas-bonus-be-a-laptop-/0,130056653,139166990,00.htm
Laptops and computer equipment are becoming the 'bonus' of choice for UK bosses who are able to make full use of a tax loophole which applies to such kit. A loophole regarding the purchase of computer kit means bosses can buy expensive 'presents' for staff and even claim the Value Added Tax (VAT) without incurring costly PAYE and National Insurance charges. Roy Maugham, tax partner at UHY Hacker Young, said "Laptops are becoming a popular cost-efficient employee benefit." Maugham explained that an employer who spends Ã,£2,000 (AU$4,800) on a laptop "to use for work" can reclaim Ã,£297.87 (AU$715) worth of VAT. The employee also avoids National Insurance charges of Ã,£220 (AU$528) and an income tax bill of up to Ã,£800 (AU$1920) which would have been charged if the bonus was simply delivered in cash. The loophole only applies to computer equipment and the machine must be registered to the employer, to maintain the pretence of 'work ownership', similarly the employee must hand it back to his or her boss after five years - by which time an upgrade is probably long overdue. "Annual bonuses are proven to encourage staff loyalty and performance. In this way they can offer even more value for money," added Maugham.
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