Mobile telephones

Tax treatment - Installation

The installation and fixed costs of a mobile telephone are not treated as a benefit-in-kind on an employee. Therefore employees will not be taxed on them, and any element included in the car seller's invoice can be excluded when calculating the P11D value. Since April 2006 this exemption can only be applied to one mobile per employee.

Tax treatment - Usage

Rental and usage of a company supplied mobile telephone does not give rise to a taxable benefit, even when the Employer does not require the user to make good the cost of private calls. Therefore the company must rely on its own controls to keep private usage costs in check. Section 155AA of the ICTA 1988 exempts the provision of mobile phones being treated as a benefit, but since April 2006 this only applies to one telephone per employee.

Beware!

If an employer pays the costs of the mobile belonging to an employee, or issues pay-as-go vouchers, these are not covered by the exemption. Also if the employer was to offer a salary increase in return for giving up the mobile, then keeping the mobile would give rise to a taxable benefit equivalent to the salary sacrifice.

Cost controls

Companies without many mobile phones are still exposed to the high cost of calling to mobiles. Until regulations come into force to bring down these rates, employers may consider the addition of special mobile lines to their main switchboard to reduce these costs.

The law

Any kind of behaviour behind the wheel which takes your concentration off the road could get you into trouble. From 1st December 2003, use of a handheld phone will be subject to a £30 fine and there are plans to make it an endorseable offence. See the DFT for details.There is a useful list of FAQS on their site. In the event of a serious accident, the police are likely to check mobile telephone records to see if a call was in progress at the time.

Update

From 27th February 2007 drivers caught using a handheld mobile phone will receive three penalty points as well as a £60 fine.