Mobile telephones

As a result of the recent changes to the law on the use of mobile phones in cars, many employers are paying for hands-free installations of mobile telephones in company cars. The provision of a mobile phone is not a reportable benefit under the provisions of the Benefits Code. Section 319 of the Income Tax (Earnings and Pensions) Act 2003 removes any liability for tax on the provision of a mobile telephone. Although that section explains what does not qualify as a mobile phone, it does not define what a "mobile phone" includes.

The Inland Revenue's Employment Income Manual (page EIM21780) defines mobile phones as "equipment (including equipment installed in a car) that can be used to transmit spoken messages…". We asked the Inland Revenue whether this definition of "equipment" includes the cradle and other equipment installed to make the operation of the phone hands free. Should employers report on form P11D the cost incurred to install hands free equipment in a car?

The response was a follows:

Yes: cost of installation of hands-free mobile phone equipment and the equipment to make it function is covered by the exemption. EIM is being revised to explain this.
...back to 26 February 2004