iPhone - BIK?

[mudskipper]

I'm well overdue for a nice new phone. Was going to get a iPhone through LtdCo, but a bit confused about the tax side - I like to keep things simple!

HMRC guidance on the subject of phones - iPhones don't count primarily as phones, so the nice simple rules don't apply.

I know lots of people have iPhones - how do you split this for tax purposes on the P11D? I'm thinking it might be more hassle than it's worth, and just to get personally, or go for a different phone which isn't specifically named as not being a phone.

[Moscow Mule]

If you get paid under £8500 a year, it doesn't matter:

HM Revenue & Customs: Assets - made available to an employee

Assets made available for private-only use or mixed business and private use

Definitions or restrictions

You make an asset available to an employee for private-only use or for mixed business and private use.
What to report, what to pay

For employees earning at a rate less than £8,500 per year, you have:

• no reporting requirements
• no tax or NICs to pay

For company directors or employees earning at a rate of £8,500 or more per year:

• report on form P11D – section L
• pay Class 1A NICs on the value of the benefit

Work out the value to use

There are two steps to working out the value to use:
1. Take the greater of

• the asset’s annual value (20 per cent of it’s market value when you first provided it as an employee benefit)
• any annual rental or hire charges you pay for it

2. Add any other amounts you have spent during the tax year on making the asset available – such as any running costs you’ve covered.
You should reduce the value proportionately if either of the following applies:

• you made the asset available to more than one employee during the tax year
• you used the asset directly for your business during the year in some other way than making it available to your employee

The rules for assets outlined in this guide don’t apply to cars, vans or living accommodation. Go to ‘More useful links’ at the end of the page for more information on these topics.

[DaveB]

If you get paid under £8500 a year, it doesn't matter:

HM Revenue & Customs: Assets - made available to an employee

Yes it does.

Assets made available for private-only use or mixed business and private use

Definitions or restrictions

You make an asset available to an employee for private-only use or for mixed business and private use.
What to report, what to pay

For employees earning at a rate less than £8,500 per year, you have:

no reporting requirements
no tax or NICs to pay

For company directors or employees earning at a rate of £8,500 or more per year:

report on form P11D – section L
pay Class 1A NICs on the value of the benefit
Work out the value to use

There are two steps to working out the value to use:
1. Take the greater of

the asset’s annual value (20 per cent of it’s market value when you first provided it as an employee benefit)
any annual rental or hire charges you pay for it
2. Add any other amounts you have spent during the tax year on making the asset available – such as any running costs you’ve covered.
You should reduce the value proportionately if either of the following applies:

you made the asset available to more than one employee during the tax year
you used the asset directly for your business during the year in some other way than making it available to your employee
The rules for assets outlined in this guide don’t apply to cars, vans or living accommodation. Go to ‘More useful links’ at the end of the page for more information on these topics.

For company directors or employees earning at a rate of £8,500 or more per year:

As a company director you still have to declare it and pay BIK.

The context is clear. Employees earning less that £8500 have nothing to pay. Company directors or employees earning over £8500 do.

[Moscow Mule]

Misread that then didn't I.

[Clare@InTouch]

You can have one mobile phone with no BIK.

You can also provide a blackberry or iphone and, as long as any private use is not significant and purely incidental, there would be no BIK either.

From HMRC:

"Exceptions
You have no reporting requirements and no tax or NICs to pay for directors or employees earning at a rate of £8,500 or more per year if the asset you’re making available is:

•office equipment or supplies provided on your premises for your employees to use when doing their jobs
•office equipment or supplies provided for business-only use elsewhere (such as in the home of an employee who works from home)
These exceptions can still apply even if there is an insignificant amount of private use by the employee."

[mudskipper]

You can have one mobile phone with no BIK.

You can also provide a blackberry or iphone and, as long as any private use is not significant and purely incidental, there would be no BIK either.

From HMRC:

"Exceptions
You have no reporting requirements and no tax or NICs to pay for directors or employees earning at a rate of £8,500 or more per year if the asset you’re making available is:

•office equipment or supplies provided on your premises for your employees to use when doing their jobs
•office equipment or supplies provided for business-only use elsewhere (such as in the home of an employee who works from home)
These exceptions can still apply even if there is an insignificant amount of private use by the employee."

Maybe I'm too honest - I think it's fair to say my personal use would at least match my business use. Think I'll abandon the idea and look for something different.

[Stag Cozier]

Maybe I'm too honest - I think it's fair to say my personal use would at least match my business use. Think I'll abandon the idea and look for something different.

Get the iPhone contract in the company name and get the company to pay for it. Since HMRC don't view the iPhone as a "phone" as it's primary function in their eyes is not making and receiving calls. Similarly, like a BB, it's primary purpose is emails.

Your company can provide you with a mobile and iPhone and BB like *Clare* mentioned. Just get it in the company name. How will Her Maj's RC know what proportion of private use you make. As long as you are checking your work emails on the iPhone, I would claim the lot. Plus no BIK.

[ChimpMaster]

I've got an iPhone, which is under contract in my Ltd name - yes I use it for personal calls and emails but it is my main point of contact for the client too. I provide 24/7 cover and this is the phone that the client must call me on.

It's also handy that I can listen to music on it on my way to *work*. I never use it for music at any other time! (yes that might not wash with the taxman)

[SueEllen]

Maybe I'm too honest - I think it's fair to say my personal use would at least match my business use. Think I'll abandon the idea and look for something different.

You run a small business and if you are in lots of industries you are expected to be contactable by email and phone most of the time, hence a smart phone means you can be. They obviously also have other functions i.e. cameras, ability to go on the internet, play music but that's the entire point of them as some businesses need these functions whether rarely, occasionally or all the time.

Plus I have got work through personal contacts sent via my personal email address so I don't see what your problem is. If you are a business you are expected to use different ways to generate clients and this may be via personal contacts.

[Ardesco]

I'm well overdue for a nice new phone. Was going to get a iPhone through LtdCo, but a bit confused about the tax side - I like to keep things simple!

HMRC guidance on the subject of phones - iPhones don't count primarily as phones, so the nice simple rules don't apply.

I know lots of people have iPhones - how do you split this for tax purposes on the P11D? I'm thinking it might be more hassle than it's worth, and just to get personally, or go for a different phone which isn't specifically named as not being a phone.

What a load of pap, they are blatantly just trying to get more revenue due to the fact that Blackberry's and iPhone are so popular. What do these two phones do that a Android or the latest win mobile couldn't theoretically do as well? I'd love to see them take you to court and argue that your iPhone isn't a phone...