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Where Taxpayers and Advisers Meet

Expenses and benefits: mobile phone handset contribution

davidnorcott
Posts: 1
Joined: Mon Jul 30, 2018 10:29 am

Expenses and benefits: mobile phone handset contribution

Postby davidnorcott » Mon Jul 30, 2018 10:42 am

Hi all - first post, apologies if this isn't quite the right section for it.

I'm an employee, and my company provides me with a mobile phone for business use. There is an upper limit on the value of the handset we can choose from - however I'd like a specific phone which is above that limit.

Is it possible for me to pay a one-off contribution to the company to make up the difference for that handset, without losing the exempt status of the phone from tax, National Insurance and reporting point of view? The contract would still be entirely between my company and the supplier.

The guidance seems fairly clear that it would be reportable if part of a Salary Sacrifice arrangement, but I don't think this quite fits that model.
https://www.gov.uk/expenses-and-benefits-mobile-phones/whats-exempt

Advice very gratefully received!

Thanks a lot

Dave

RMC
Posts: 414
Joined: Wed Aug 06, 2008 3:35 pm

Re: Expenses and benefits: mobile phone handset contribution

Postby RMC » Sun Aug 05, 2018 1:22 pm

This is how this devious scheme could be attacked by HMRC under the Salary Sacrifice rules:
Step 1: Reduce your salary by the payment you made for being allowed to choose a mobile. Refund to you and the employer tax and Class 1 NIC paid under PAYE.
Step 2: Your employer if VAT-registered presumably intends to invoice you for allowing you to make a choice, charging VAT. No VAT is payable under the SS rules, so this would be refunded, too.


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