What tax is due if you supply your staff with a mobile phone?

There is good news here because HM Revenue and Customs (HMRC) does not require you report the provision of a mobile phone to a staff member or deduct and pay tax and National Insurance where the following two conditions are met:

• you provide your employee with only one mobile phone
• the phone contract is between the company and the mobile phone supplier

Even where the employee uses the mobile phone for some private calls, they will still not be required to pay tax on the provision of the mobile phone. It is important to note that this generous tax exemption only applies where the mobile phone contract is made directly with the company and the company pays the bills. The exemption will not apply where you reimburse an employee’s personal mobile phone bills, or you supply them with a landline.

If you would like help to determine if any other benefits supplied to your employees create tax charges please contact us on 0203 457 3737 or use our simple online contact form to arrange a free initial consultation.

Date published 6 Oct 2020 | Last updated 7 Oct 2021

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.