The following Employment Tax guidance note Produced by Tolley in association with Philip Rutherford provides comprehensive and up to date tax information covering:
The provision of mobile phones (or sim cards) to employees is a common benefit. There is a general exemption from tax under ITEPA 2003, s 319. Despite this, in a number of circumstances, a tax liability could arise. These are considered below after details of the exemption.
Before considering whether a tax liability arises, first establish if there is an exemption available.
The exemption in ITEPA 2003, s 319 covers the following:
the provision of one mobile phone to an employee. The mobile phone can cover a number of connections, eg one sim card for a car system and one for a mobile phone
the line rental and the cost of all private calls associated with that mobile phone
The exemption covers any amount of private use. In reality, employers will want to limit their exposure to cost, but even international calls do not attract a taxable benefit on the employee.
The exemption does not cover a device which is physically connected to land line or a wireless extension of a telephone network. See the Telephones guidance note for information on landline phones.
HMRC guidance is at EIM21779.
While it may appear obvious what is a mobile phone, the development of mobile technology has meant that HMRC has had to give guidance on what it accepts as a mobile phone. HMRC now accepts that ‘smartphones’ are mobile phones for the purposes of the exemption such that issues on the definition now rarely arise. Therefore, mainstream smartphones, such as an iPhone or Android device, are mobile phones for the purposes of the exemption.
HMRC also accepts that certain types of personal digital assistant (PDA) qualify as mobile phones. If a PDA has no telephony function it cannot, by definition, be considered a mobile phone. As smartphones are now so comm
**Free trials are only available to individuals based in the UK. We may terminate this trial at any time or decide not to give a trial, for any reason.
Access this article and thousands of others like it free for 7 days with a trial of TolleyGuidance.
Read full article
Already a subscriber? Login
There are several sets of provisions in the Taxes Acts which relate to ‘close’ companies, most of which are anti-avoidance measures aiming to catch transactions between those companies affected and their owners, where there may otherwise be a tax advantage. Broadly speaking, most owner-managed or
Normal due dateSmall companies (including marginal relief companies) are required to pay all of their corporation tax ― nine months and one day ― after the end of the chargeable accounting period.For example, where a chargeable accounting period ends on 31 December 2018, the due and payable date for
From 6 April 2015, an individual can elect to transfer 10% of the personal allowance (£1,250 in 2020/21 and 2019/20) to the spouse or civil partner where neither party is a higher rate or additional rate taxpayer. The legislation calls this the ‘transferable tax allowance’ but the GOV.UK website
The rent-a-room scheme was introduced in the early 1990s to encourage homeowners to take in lodgers.Fundamentally, the rent-a-room scheme is a relief which means that the rent received by an individual from a lodger (up to a prescribed limit) can be exempt from income tax. If the gross rents are
To view our latest tax guidance content, sign in to Tolley Guidance or register for a free trial.