Putting Your Mobile Phone Through The Company

An employee can be provided with a mobile phone tax-free. This can amount to a valuable tax-free benefit.

However the exemption only applies if the contract for the provision of the phone is between the mobile phone provider and the company. THIS IS IMPORTANT. Personal expenses incurred by the employee is irrelevant and hence fully allowable in this case. The cost is deductible in computing the profits of the company for corporation tax purposes.

If the contract is between the employee and the mobile phone provider and the employer pays the bill on the employee’s behalf, the employer is regarded as settling a personal liability on the employee’s behalf and this must be recorded on the P11D and will be taxable as a result.

HMRC now accepts that smartphones fall within the scope of the exemption.