It’s HMRC On The (Mobile) Telephone

Close up of a man using mobile smart phone

Once again we find ourselves in P11D season, that joyous time in the tax calendar where expenses and benefits provided by employers to their employees are dissected for inclusion on the P11D.

Employers will no doubt have the same conversations they have with their accountants each year concerning the chargeability of benefits and expenses and one such conversation will centre around mobile phones.

If an employer provides an employee (or director) with a mobile phone it will only be exempt from tax and national insurance if the employee is provided with only one mobile phone or sim card and the contract is between the employer and the supplier. This can prove an issue for small companies that have transferred from sole trades where the proprietor has kept the contract in their name on becoming a director.

If the employer reimburses anything more than itemised business calls and the contract is between the employee (or director) and the supplier then a benefit in kind will be assessed on both employee and employer and tax and NIC will be due.

The expenses and benefits system is currently undergoing a re-haul and if you’re unsure of any existing or new procedures it is advised that you speak to your tax adviser.

Please note: This article is a commentary on general principles and should not be interpreted as advice for your specific situation.

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