Is your company phone a benefit?

Robyn Hughes

An employer can provide an employee with a single mobile phone for private use without creating a taxable benefit. Smartphones such as iphones and Blackberrys however have not qualified as ‘mobile phones’ and therefore have been considered taxable benefits.

Finally on 20 February 2012, HMRC has accepted that smartphones qualify as ‘mobile phones’ for the purpose of the tax benefits legislation.

However tablet and laptop computers are still ‘computers’ and not ‘phones’ and the provision of these devices remain a taxable benefit.

So what does this mean in terms of tax?

Firstly, employers who have provided a smartphone in 2011/12 should treat it in the same way as any other mobile phone. So only include a benefit on form P11D for any mobile phone/smartphone that is either:

  • over and above the first one provided to the employee, or
  • provided to a member of the employee’s family or household rather than to the employee personally.

Secondly employers who provided a smartphone between 2007/08 and 2010/11 can seek repayment of the Class 1A NICs paid on the benefit of the smartphone. The information provided will assist HMRC to make rebates to the employees affected.

HMRC will have to rebate affected employees, full details on how to make a claim can be found on the Revenue’s website here.

If you’d like more help on P11Ds and tax rebates why not call me on 0845 3651000 or email me.