118A Costs and expenses in respect of personal security assets and services

Summary

This section provides, subject to conditions, for an exemption from a benefit-in-kind charge in circumstances where an employer incurs expense in providing a security asset or service for use by a director or employee.

In order to qualify for the exemption there must be a credible and serious threat to the physical personal safety of the director or employee, which arises wholly or mainly from his or her employment.

Details

(1) The terms “asset” and “service” are defined for the purposes of the section.

(2) In order to qualify for the exemption there must be a credible and serious threat to the physical personal safety of the director or employee, which arises wholly or mainly from his or her office or employment.

(3) The section applies in respect of expense incurred by the company, or by the director or employee and subsequently reimbursed by the company, in relation to the provision or use of, or associated expenses connected with, an asset or service which is provided for or used by the director or employee to meet the threat to their personal physical security, and which was provided for the sole purpose of meeting that threat.

(4) Subject to subsections (6) and (7), a charge to benefit-in-kind under section 118(1) shall not apply in respect of an expense to which this section applies.

(5) Incidental usage of an asset provided by a company for the purpose of personal physical security, will be ignored for the purposes of determining whether a charge applies or not.

(6) Where the asset provided is intended for use only partly for the purposes of dealing with a threat to the personal physical security of the individual, then in such circumstances, the exemption from the charge to benefit-in-kind will only apply in relation to that portion which is for that intended use.

(7) The exemption will only apply in relation to a service provided where the benefit resulting to the director or employee consists wholly or mainly of an improvement in their personal physical security.

(8) Where the asset or service provided is permanently attached to a property, or the director or employee subsequently becomes entitled to that asset, or if there is a consequential benefit arising to a member of the family or household of the director or employee, this does not exclude the expense incurred by the company from coming within the provisions of the section.

Relevant Date: Finance Act 2021