Archives >

Job Security?

If your employer pays for something that benefits you, you normally have to pay tax on it. But what about CCTV and security fences around your house, or dog handlers to guard you? You won't have to pay tax on this if it is to respond to a special risk to your safety which arises from your job. If there's a risk for some other reason - or there's no special risk, but you are paranoid - or it's just to protect your property, not you - then you will be taxable on the benefit of the costs incurred for you. This was highlighted by a recent case featuring measures taken by Lord Hanson's company to protect him. The Revenue argued that he failed to meet the conditions to receive protection tax-free - the security was for his property, there was no special risk, and such risk as there was arose from his friendship with the Prime Minister rather than from his employment. The Appeal Commissioner was more sympathetic to the taxpayer, and believed that this was a genuine attempt to deal with a real risk to the employee. The attitude of the Revenue is quite surprising - it's an area where you might expect them to be more sympathetic. This is a rule which may be of importance to a sadly increasing number of employers, as animal rights activists appear to target anyone with the remotest connection to animal testing companies. The case can be found on the Special Commissioners website (www.financeandtaxtribunals.gov.uk) under the reference Lord Hanson v Mansworth SpC 00410. One peculiar feature is that, although the Commissioner held that there should be no tax charge, the decision states that the company was negligent in dealing with the issue. It should have declared that security services were being supplied, and Lord Hanson should have claimed a deduction, or it should have specifically agreed with the Revenue to include such services under an expenses dispensation. The company had simply ignored them. That would have been correct for goods supplied (such as security fences or a CCTV system), because those are exempt from income tax; but services supplied are only eligible for a deduction, so they are supposed to be reported.