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HMRC internal manual

Employment Income Manual

HM Revenue & Customs
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Tax treatment of insurance agents: claims for capital allowances on computers

The application of the test in EIM36540 can present difficulties in relation to insurance agents paid by commission. What the duties require in such cases is not easily identifiable because agents may simply have to sell as many of their employer’s products as they can, and themselves provide the equipment for doing so.

Capital allowances may be given for the cost incurred by an agent in purchasing a computer or word processor and their peripherals provided that the claimant:

  • is paid by, or largely by, results and
  • although the objective of selling insurance is clear, the extent of the agent’s sales effort (that is, the method by which the agent is to achieve sales) is not clearly defined or stereotyped and
  • the agent is required to bear the cost of any equipment-performing functions or activities designed to achieve that objective (the employer neither providing nor paying for such equipment).

Allowances are due to the extent that the equipment is actually used as described above. If it is also used for other purposes, such as keeping personal financial records, an apportionment of the allowances will be necessary (see EIM36570).