HMRC now accept 'smartphones' qualify as 'mobile phones'

[russell]

Some of the business accounts allow one phone contract but multiple handsets, so my wife has a phone also (she does a lot of the paperwork).

[Nixon Williams]

My accountant advises:

"that provided that your company provides you with just one phone, that the contract is in the company name and that the monthly payments are made from the company bank account, then HMRC will accept this with no extra tax liability on either the employer or the employee. However you need to make sure that the phone is wholly, exclusively and necessarily used for the business only."

I think your accountant is confused.

Provided that you do use the phone for business purposes, there is no requirement to only use it for business use.

Personal useage is allowed, provided you follow the requirements, basically to have the contract in the company name and to pay the charges from the company account.

HM Revenue & Customs: Telephones - mobile

Alan

[Goatfell]

My accountant advises:

"that provided that your company provides you with just one phone, that the contract is in the company name and that the monthly payments are made from the company bank account, then HMRC will accept this with no extra tax liability on either the employer or the employee. However you need to make sure that the phone is wholly, exclusively and necessarily used for the business only."

This is contradicted by the original post:
1 Where you provide a smartphone in 2011-12, treat it in the same way as any other mobile phone. Only include a benefit on form P11D for any mobile phones/smartphones that are either over and above the first one provided to the employee or that are provided to a member of the employee’s family or household rather than to the employee personally.

From
HM Revenue & Customs: Revenue & Customs Brief 02/12

Which leads to HMRC's advice for mobile phones:

You provide an employee with one mobile phone
Definitions or restrictions
You make one mobile phone (or SIM card) available for use to an employee. The phone can be used for both business and private calls. The contract is between you and the mobile phone operator.
The same rules apply whether you pay for rental charges, business calls and/or private calls.
What to report, what to pay
You have:
• no reporting requirements
• no tax or NICs to pay

From:
HM Revenue & Customs: Telephones - mobile

HTH
Or as Alan says /\

[ronanm]

This is contradicted by the original post:
1 Where you provide a smartphone in 2011-12, treat it in the same way as any other mobile phone. Only include a benefit on form P11D for any mobile phones/smartphones that are either over and above the first one provided to the employee or that are provided to a member of the employee’s family or household rather than to the employee personally.

From
HM Revenue & Customs: Revenue & Customs Brief 02/12

Which leads to HMRC's advice for mobile phones:

You provide an employee with one mobile phone
Definitions or restrictions
You make one mobile phone (or SIM card) available for use to an employee. The phone can be used for both business and private calls. The contract is between you and the mobile phone operator.
The same rules apply whether you pay for rental charges, business calls and/or private calls.
What to report, what to pay
You have:
• no reporting requirements
• no tax or NICs to pay

From:
HM Revenue & Customs: Telephones - mobile

HTH
Or as Alan says /\

Thanks to you both (Alan and Goatfell)

I think the last links re: "business and private" contain the requisite clarification and I have relayed it to my accountant

I understand the data is on the hmrc site, but isn't there any accounting body which simplifies this stuff?! I'm not an accountant yet the onus was on me...

[northernladuk]

I understand the data is on the hmrc site, but isn't there any accounting body which simplifies this stuff?! I'm not an accountant yet the onus was on me...

As a director of your company you are legally responsible for your accounts so have to make sure you understand them well. Accountants are not proactive and will provide the service offered, they very rarely offer proactive advice and certainly do not tutor you on all the in's and out's of running your business. Unfortunately it does fall to us to dig this stuff out hence all the guides, forums and so on. Just a matter of researching it I am afraid. 'tis annoying at times though.

When the accountant doesn't come up with the goods is a different kettle of fish and should be solved with your business going elsewhere to someone that knows IMO.

[ronanm]

As a director of your company you are legally responsible for your accounts so have to make sure you understand them well. Accountants are not proactive and will provide the service offered, they very rarely offer proactive advice and certainly do not tutor you on all the in's and out's of running your business. Unfortunately it does fall to us to dig this stuff out hence all the guides, forums and so on. Just a matter of researching it I am afraid. 'tis annoying at times though.

When the accountant doesn't come up with the goods is a different kettle of fish and should be solved with your business going elsewhere to someone that knows IMO.

Interesting - I genuinely did not realise that was the case, particularly when the accounting firm used is, by looking at past posts, used very widely by those on here.

I can't think of any other profession where that's the case. If you pay a lawyer, he/she interprets the law for you. Having said that, if I employed the services of a solicitor, I would still solicit myself of an evening

[russell]

As a director of your company you are legally responsible for your accounts so have to make sure you understand them well. Accountants are not proactive and will provide the service offered, they very rarely offer proactive advice and certainly do not tutor you on all the in's and out's of running your business. Unfortunately it does fall to us to dig this stuff out hence all the guides, forums and so on. Just a matter of researching it I am afraid. 'tis annoying at times though.

When the accountant doesn't come up with the goods is a different kettle of fish and should be solved with your business going elsewhere to someone that knows IMO.

Yeah the services offered are to do my company accounts though, so they are responsible.

[northernladuk]

Found here...

Company Accounts and a director

Company Accounts and a director’s responsibility

All UK limited companies are required to keep accurate accounts and submit the relevant accountings statements to Companies House and HM Revenue and Customs within the correct time frames. This responsibility falls upon the directors of the company.

Directors are required by law to-
Maintain appropriate accounting records for the company
Prepare an annual profit and loss account
Prepare a balance sheet that shows true and fair views of events
Prepare a directors report
Make these records available to shareholders and the general public. (This is done by submitting accounts to Companies House the registrar of limited companies)

These responsibilities are legally embodied within the Companies Acts 1985, 1989 and more recently 2006. Company law goes a long way by setting out the form and content of the accounting statements that the directors must publish.

Whilst company law states that it is the directors responsibility to maintain accurate accounts most directors will appoint an accountant to prepare the actual financial statements for the company. This does not transfer the responsibility to the accountant and a director will still need to sign the relevant paperwork and sign a statement that the accounts are true and fair.
Depending on the size of the limited company it may also be necessary to appoint auditors to the company. The requirement is based on turnover and the threshold is adjusted on a regular basis. The main duty of auditors is to make a report as to whether, in their opinion, the accounting statements do show a true and fair view of the company’s finances. They also ensure that the accounts comply with statutory accounting standards. The auditors statements are then included with the accounts submitted to the registrar of companies.

This post was submitted by Steve Harris who provides Company Formation services

[ronanm]

Found here...

Company Accounts and a director

Thank you.

"true and fair."

I did some accountancy in university beyond preparing income income statement of a fictional golf club (but am not an accountant) yet would have previously interpreted the above as "the director did not withold any material items to ensure that the accounts were a good reflection of the company's financial situation" - not that the accounts had been arrived at in accordance of what he/she interpreted as the correct application of accounting standards.

Again, thanks for pointing this out. I have been contracting for a year or so so the education continues

[ronanm]

Sorry to hog this thread, but, having pointed out the "business and private" guidance HRMC issued (above), my accountant has come back with:


A very small amount of personal use is permitted as one off case. However we normally recommend that you purely use the smartphone for business to avoid any future dispute with HMRC if investigated.
I replied:

"What constitutes a "very small amount"? I know that this is prudent, but it is not mentioned in the hrmc guidance at all?"

to which they replied:

HMRC has never defined or make clear what would constitute as small amount. It is normally left under discretion of the HMRC officer. This is why we never recommend personal use.

I guess I can't force them to see the interpretation as Nixon Williams and others might.