Not sure why employees would not be allowed to use their own hand tools? We have a policy whereby hand tools are checked on a monthly basis and powered tools by their relevant periodic test date monthly/3 monthly/6 monthly etc.

Your policy should be very simple to put together but there is little or no point in you adopting someone else`s 'policy' on this as it depends on the type of work, work environment and types of tools allowed/disallowed.

Amoung other things U also have to consider HAVS, Noise doses and emissions as they are still employees as letting people use that own tools is cheap in the begining but can be expensive later on

I am not disagreeing with the last two posts however these would just be the norm of considerations whether tools are supplied or not. I was simply referring to the original comment of "I'm sure to get lots of replies saying that the Policy is it's not permitted". As with all general advice on this forum, it is impossible to cover all eventualities.