employee benefits


Tax free mobile phones

Posted on March 19th, by Helen in Payroll, Tax. Comments Off

You are allowed to provide your employees with one tax free mobile phone each. But you have to do it the right way otherwise it could cost you and your employee tax and national insurance.

The tax free mobile phone

The contract must be between the employer and the mobile phone company.
There are no reporting requirements
There is no tax or NI to pay
Tablets are not included but smartphones are.

Employee’s own phone – employer pays supplier direct

The contract is between the employee and the phone company
You have to report on a P11D
Add the value of the benefit to earnings through the payroll
Employer pays class 1 NI
Employee pays NI, but no tax
No NI is payable if it was acquired for business use only but still have to report

Employee’s own phone – employer reimburses monthly contract

The contract is between the employee and the phone company
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