Mobile for company secretary

[Lewis]

Hi All,

I'm looking at moving my mobile phone account from personal to business. Have read all threads on this. Only thing that seems to be uncertain is if Co Sec (my wife) who does accounting for company and is paid salary (around £5K) is allowed to have mobile phone via company. Some people seem to think you need to justify her need for one (an accountants post). Others say each employee can have one phone tax-free for personal use with no BIK and no justification required. Clarification from anyone in the know much appreciated.

Cheers, Lewis

[opc]

If a mobile phone is required solely for business used by your secretary in the course of her work preparing the company accounts (a couple of hours a month?), I'm sure you would be able to justify this to the taxman.

If on the other hand it's a thinly disguised method of exploiting the Limited Company setup which the taxman can easily determine that your wife will use principally for personal calls...you may have issues.

The choice as to whether this risk is worth it for the cost of a phone isyours......

[Jason D]

If on the other hand it's a thinly disguised method of exploiting the Limited Company setup

Oh the irony.

[Lewis]

If a mobile phone is required solely for business used by your secretary in the course of her work preparing the company accounts (a couple of hours a month?), I'm sure you would be able to justify this to the taxman.

If on the other hand it's a thinly disguised method of exploiting the Limited Company setup which the taxman can easily determine that your wife will use principally for personal calls...you may have issues.

The choice as to whether this risk is worth it for the cost of a phone isyours......

Sounds logical but I have read some things that led me to believe you maybe don't need to justify business use - it seems you can provide a personal mobile phone for private use, see HMRC site here http://www.hmrc.gov.uk/manuals/eimanual/EIM21779.htm. So is it correct that each employee can get a mobile for personal use irrespective of business usage?

[opc]

Sounds logical but I have read some things that led me to believe you maybe don't need to justify business use - it seems you can provide a personal mobile phone for private use, see HMRC site here http://www.hmrc.gov.uk/manuals/eimanual/EIM21779.htm. So is it correct that each employee can get a mobile for personal use irrespective of business usage?

The same link also says this "See EIM21630 regarding the calculation of the amount of the benefit when an asset (e.g. a mobile phone) is made available to an employee for private use. ".

[TheRightStuff]

is it worth all the hassle for a few quid more. Spend more time working out how to increase your rate then trying to squeeze out a few pence here and there.

[Euro-commuter]

Hi All,

I'm looking at moving my mobile phone account from personal to business. Have read all threads on this. Only thing that seems to be uncertain is if Co Sec (my wife) who does accounting for company and is paid salary (around £5K) is allowed to have mobile phone via company. Some people seem to think you need to justify her need for one (an accountants post). Others say each employee can have one phone tax-free for personal use with no BIK and no justification required. Clarification from anyone in the know much appreciated.

Cheers, Lewis

The company can provide a company mobile phone to an employee , and they can use it freely to make personal calls.

But if the company pays for a mobile phone that is in the name of the individual, that is a benefit.

Can you identify an accountant's post that said otherwise?

HMRC say

http://www.hmrc.gov.uk/manuals/eimanual/EIM21779.htm

In most circumstances the provision of one mobile 'phone to a director or employee for private use is exempt from charge. The exemption covers the phone itself, any line rental and the cost of private calls paid for by the employer on that phone.

(EIM21778 says only 1 phone per person, family and household not included: i.e. your wife can have 1 as employee, not just for being family).

http://www.hmrc.gov.uk/manuals/eimanual/EIM21779.htm

[Euro-commuter]

The same link also says this "See EIM21630 regarding the calculation of the amount of the benefit when an asset (e.g. a mobile phone) is made available to an employee for private use. ".

It says

If only one mobile phone is provided for both business and private use it will be exempt under section 319. If two mobile phones are provided for business and private use, one will be exempt and the other will represent a benefit. It is up to the employee and employer to decide which one will be exempt and which one will be chargeable as a benefit.

See EIM21630 regarding the calculation of the amount of the benefit when an asset (e.g. a mobile phone) is made available to an employee for private use.

So this page (EIM21779) says that one phone is exempt from a tax charge as a benefit; and EIM21630 tells you how to calculate the charge (a detail that you will not need to know in this case because of the exemption, but might need to know in other cases, e.g. if there were 2 phones for 1 person).

[ASB]

He cannot argue that she doesn't deserve it because that is not relevant from the rules.

The argument the taxman might put forward is that it is a second phone for you provided to a family member, thus the exemption does not apply.

[Lewis]

Can you identify an accountant's post that said otherwise?

4th post down by Nixon Williams
http://forums.contractoruk.com/threa...10-mobile.html