“If the tablet is deemed to be allowable, then its full value is deductible from a contractor’s company profits in the corporation tax return, and the cost is depreciated over three years in the contractor limited company’s profit and loss account.”īenefit in kind charges for tablets bought mainly for personal use HMRC provides useful examples in its guidance note EIM 21613, which covers the most likely contractor scenarios. The definition of ‘insignificant private use’ can be more problematic, as HMRC uses different definitions for different assets. Greater productivity when commuting, note taking in meetings and performing presentations are all likely to be accepted as valid business reasons. That means the contractor’s limited company must be buying the iPad or tablet principally for business purposes, and that it is essential for the contractor to be able to perform their duties. “HMRC’s guidance says that for computers provided to employees by their company to be exempt from benefit in kind charges, ‘the sole reason the computer must have been provided must be for the individual to carry out their duties of employment’ and that private use must be insignificant.” “Tablets are currently effectively treated as laptops and come within the normal rules for computers,” continues Abbott. Tablets bought by a limited company for business purposes “And they can be fully deductible if bought for business purposes by a contractor’s limited company.”īut to avoid a potentially hefty benefit in kind (BIK) charge, contractors must be able to demonstrate that their tablet was bought principally for business use, and that any personal use is insignificant.Īccording to Abbott, the tax treatment of tablets is a classic case of how tax legislation has failed to keep pace with technology: “Tablets are not treated as mobile phones or under the smartphone legislation introduced by HMRC in 2006 because, even if they are 4G and Wi-Fi enabled with voice calling capabilities, their primary purpose is not for making calls.”
“The short answer is ‘yes’ iPads and other tablets and accompanying data charges can be claimed as a legitimate business expense,” explains James Abbott, owner and head of tax at contractor accountant Abbott Moore.
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However, I can’t find any information about tablets on HMRC’s website, so I’m not sure whether tablets are treated like mobile phones, or like laptops, and whether a tablet is an allowable expense for my limited company.Ĭan I buy an iPad or Android tablet that is tax deductible? I am seriously considering buying a 3G tablet, rather than a laptop, as I can be much more productive during my daily commute and use the tablet for note taking in meetings and client presentations. I’m about to invest in some new IT equipment for my engineering contracting business.
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