9. Communications and IT

See also:

9.6 Broadband and internet access

(a) Definition

Broadband and internet access is defined as the initial set-up and ongoing service charges for access to the internet or a data network. It does not include the equipment necessary to enable such access which should be considered separately under the guidance for computers and other IT equipment.

Broadband and internet costs
The following are considered to be examples of broadband and internet costs:


  • Connection charges;
  • Dial-up;
  • Broadband;
  • Cabled or wireless access to the internet or private data networks.

The following are NOT considered to be broadband or internet costs:

Exclusions to the definition of broadband or internet:

  • Mobile telephones, including those providing internet access as part of their service
  • Fixed-line telephones, or separate telephone line rental charges;
  • Any equipment used to access an internet or network connection (e.g. computers, PDAs, modems, routers, etc).

A flowchart is provided to help determine correct treatment of payments relating to internet and broadband payments.

(b) Broadband and internet services provided by the University

Where broadband and internet services are provided and paid for by the University then they will be exempt from any tax charge only as long as the following circumstances apply:

Tax exempt broadband and internet services provided by the University

On University premises

  • Are not considered to be a taxable benefit as long as they are used for business purposes.
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On private premises

  • The contract must be in the name of the University and not the individual living at the premises; and
  • The facility must be supplied for business use only as a necessary part of the individual's responsibilities; and
  • Staff provided this facility must have a clause in their contract of employment or a letter varying their contract that states that the provision of the telephone is a necessary requirement of their employment.

Although HMRC require that personal use of internet facilities paid for by the University but accessed on private premises be insignificant, they accept that this cannot be proven through itemized billing. Whilst there remains a requirement to ensure business use, therefore, there is no requirement to support exempt payments for broadband usage with itemized bills.

Where broadband or internet facilities are provided by the University that do not meet these rules, however, then a taxable benefit will arise. See Appendix 4.

(c) Reimbursement of the costs of private broadband or internet services

Where a broadband or internet connection is owned and usually paid for by a private individual then claims for reimbursement of costs from the University will be exempt from any tax charge only as long as the following circumstances apply:

Tax exempt private broadband and internet services - connection already exists:

Business use

  • The cost of itemized business calls only may be claimed, supported by a detailed, itemized bill. Line rental and other fixed charges are not covered by this exemption.

Where an individual does not already have an internet connection but it becomes necessary for the purposes of their work to provide one, then this can, under certain circumstances, be treated as a tax exempt arrangement if paid for by the individual rather than directly by the University. For simplicity, however, the University does not encourage this type of arrangement and, where possible, contracts should be set up in the name of the University as outlined above. If this is not possible then approval should be sought in advance from the Payroll Manager.

Reimbursement of private broadband or internet costs other than those described here may be made at the discretion of the department, but this will give rise to a taxable benefit. See Appendix 4.

(d) Broadband and internet costs incurred whilst travelling

When individuals travel in the UK or overseas, internet access is increasingly provided in airports, hotels, trains, etc. either via wireless or cabled networks. Where there is a charge for the use of such services, the following treatments apply.

Treatment of broadband and internet costs whilst travelling:

Charge is paid for directly by the University

  • Including direct settlement of bills or accounts by the University, or use of the University credit card to settle the account - there is no tax charge.

Charge is paid for by the individual and reimbursed by the University

  • This is not considered to be subject to any tax exemptions by HMRC and, as such, any reimbursement made by the University will be taxable.

These treatments assume that internet usage is made for business purposes and that any private use is insignificant - i.e. less than 10% of total usage.

For treatment of taxable payments see Appendix 4.