Provided by the employer
If you provide an employee with a mobile telephone and enter into a service agreement with the telephone company there is no liability for NICs or tax.
This applies to the provision of the telephone, the service and all calls.
Owned by an employee
Some employees use their own mobile telephones to make business calls. Where this is the case, Class 1 NICs and tax are payable if you:
- reimburse the cost of the mobile telephone, service charges or the cost of private calls
- provide the employee with a voucher for use in relation to the mobile telephone or private calls made on it.
Where you reimburse the costs incurred by an employee in making business calls on his or her own mobile telephone, you can ask for a dispensation. If you do not have a dispensation you must return the full cost to you on form P11D. No NICs will be due.
Contractual arrangements vary and so you need to check the particular tariff arrangements for the employee's mobile telephone. Business calls may not involve the employee in any expense if the tariff includes free time. In these circumstances any reimbursement will not be for the cost of business calls. Follow the link to EIM32951 for an example.
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