The subscriber to the telephone company may be a member of the
employee’s family or household or the employee’s
An employer may require an employee to have access to a home telephone because it is needed for business purposes (for example, the employee may be the contact for the police in the event that the burglar alarm sounds at the employer’s premises). In view of this the employer may wish to pay the rental charges as well as the cost of any business calls.
If the employer pays the rental charges to the employee this is
an additional payment of earnings to the employee. It will
therefore satisfy the requirements of sections 3(1) and 6(1) of the
Social Security Contributions and Benefits Act 1992 and Class 1
NICs will be due.
See NIM02010 and NIM02015 for guidance on the meaning of “earnings” and liability for Class 1 NICs.
If the employer pays the bill by sending payment direct to the
telephone company or by paying the rental charges to the family
member, etc. (whoever is the subscriber) this will still constitute
a payment of earnings for the purposes of section 6(1) if the
employee can be held to have received a benefit. Generally, it
should be possible to hold that the employee has received a benefit
as a result of the employer paying the bill, because if the
employer did not pay then the employee might have been called upon
to meet all, or at least some, of the cost.
See NIM06215 where the telephone line was installed solely for business use.