Personal Use of Company Mobile Phone

Ian Whyteside

Hi everyone,

I have an interesting one which threw me a bit earlier today.

I am aware of the general rule for company mobiles, in that as long as the personal use is incidental there is no benefit in kind and no need to involve ourselves in P11D's etc.

However, I have just come across a situation where a public sector body, knowing the general rule, has told staff that they may use the phone for personal calls but only if they agree to a �5 a month deduction from their salary to cover it.

They appear to be doing this on the grounds that though all personal use is probably still incidental they are a public body and they dont want the public accusing them of misuse of funds.

Its an admirable scheme, it relaxes everyone and keeps the polititions off their backs but does it challenge the general rule or give payroll any problems when looking at the benefit in kind process.

My gut reaction is that it makes no difference, there is still incidental private use, there is still no BIK issue and whatever financial arrangement occurs between employer and employee is up to them if th eemployer wants to limit the costs, but what does everyone else think?

Ian Whyteside

Ian Congreave

Just to clarify the extent of the exemption for mobile phones provided by employers - as long as they remain the property of the employer, the exemption applies to the full cost incurred by the employer, irrespective of the amount of personal use. Even if the phone is used exclusively for private use, there is no tax charge. So the idea of public sector employees making a contribution towards private use is a good idea to protect the public purse.

If the employer provides more than one mobile phone, one of them is fully exempt from tax under these provisions, the other(s) are exempt only if the private use is "insignificant".

For official HMRC guidance, see http://www.hmrc.gov.uk/manuals/eimanual/eim21779.htm
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Ian Whyteside

Ian,

Thank you for that, I admit I missed the extent of personal use allowed, I assumed it would be covered under the incidental use rule, you learn something new every day!

My only issue now with this enquiry is to ensure the employee gives express authority because at the moment I am not sure they do.

Thanks again.

Ian Whyteside