Reply to: Company Secretary - mobile phone charge

[northernladuk]

Not sure why everyone is getting hung up on the detail when the advantage of having a business contract through LTD over personl is negligble and you could also just buy a handset though the business and run a super cheap Sim only contract. No HMRC problems whatsoever then, whatever the small print says.

[Boo]

Of course, assuming that it is mostly used for the purposes of the company's business.

Nope, that's not the test. The test is that they are an employee.

Boo

[Jeremiah@RHJAccountants]

Jeremiah! Really!?

It's err (as in error) on the side of caution not air.

come to think of it i was looking outside and thinking i need some fresh air as i am stuck in a hot and steamy office so air was on my mind at the time

[Ignis Fatuus]

Based on what? The things that have been quoted are to clarify that an employee can use their phone for personal calls, not to say only employees are allowed phones.

In post #10 I wrote

The company can give one phone to any employee, provided that the contract is in the company's name. This phone can then be used freely for personal use.

It is available for an employee, not a secretary or director or shareholder per se: an employee.

Sorry if it wasn't clear enough.

[Contreras]

However technically:

~ if contract in company name, claim calls +rental
~ if contract in private name, claim calls only, otherwise there is a benefit in kind on the rental

What exactly does "rental" mean in this context?

The monthly contract fee covers a subsidised or 'free' handset, or included 'free' minutes, or both. So which of these elements attracts the BiK?

In my view it must be the handset subsidy that attracts the BiK - because, if the contract is in the employee's name then they have effectively been given a phone, rather than being provided with a company asset. The BiK cannot be due to the 'free' minutes element, because HMRC have already conceded that the Co. can pay for all call charges including personal use.

This matters because a SIM only contract obviously does not include a handset subsidy, so if this is what attracts the BiK then we can forget all the nonsense about who's name is on the account and just go for the best deal instead.

[d000hg]

I don't want to sound pedantic but "air on the side of caution" ?

If the company sec is not an employee then you cant do it plain and simple. (IMHO)

Based on what? The things that have been quoted are to clarify that an employee can use their phone for personal calls, not to say only employees are allowed phones.

[escapeUK]

In practice - there are always exceptions - its not something HMRC tend to pick up on - that I can tell you from having looked after 2500 or so clients.

IME is low risk.

That's because, as I have always said, the amounts of money are trivial. The tax man isnt interested in the 20% of a £35 a month phone contract, he's interested in the £1500 a month NI not paid.

[BolshieBastard]

Agreed if the company sec is not an employee i personally would air on the side of caution and not do it.

However if the company sec is an employee of the company then HMRC states one mobile phone per employee is allowable.

Jeremiah! Really!?

It's err (as in error) on the side of caution not air.

[BolshieBastard]

To Keep things very simple just make the company sec an employee of your company and then you can put the mobile phone cost and contract through the business.

Your accountant can easliy put the company sec on the payroll records if they are not on.

Here is a link to the one mobile phone per employee that was big news in Feb this year

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

As mentioned make sure the contract is in the company name and the payments come out of the business bank account and your sorted as long as you can get a good business contract!

This is my understanding too. Im surprised people still dont seem to be aware you can give each employee a smartphone and not have any issues with HMRC over it.

[Sally@InTouch]

And if that is the case then even more reason not to do it. The bill they will get after being investigated on top of everything else could be astronomical using that scale.

And let us not forget that many full blown IR35 investigations stemmed from a simple PAYE aspect enquiry...

[Jeremiah@RHJAccountants]

(pedantic hat on)

*err

My bad numbers are more my thing

[captainham]

Agreed if the company sec is not an employee i personally would air on the side of caution and not do it.

However if the company sec is an employee of the company then HMRC states one mobile phone per employee is allowable.

(pedantic hat on)

*err

[Jeremiah@RHJAccountants]

I don't want to sound pedantic but "air on the side of caution" ?

If the company sec is not an employee then you cant do it plain and simple. (IMHO)

Yes but we as accountants can only advise a the end of the day the OP can do whatever he or she wants as director of there company.

If it was me and my client asked this i would say don't do it if they are not an employee i have heard other accountants none on here thankfully say otherwise.

As they see it as low risk and that HMRC may not pick up on it.

[FiveTimes]

Agreed if the company sec is not an employee i personally would air on the side of caution and not do it.

I don't want to sound pedantic but "air on the side of caution" ?

If the company sec is not an employee then you cant do it plain and simple. (IMHO)

[Jeremiah@RHJAccountants]

And if that is the case then even more reason not to do it. The bill they will get after being investigated on top of everything else could be astronomical using that scale.

Agreed if the company sec is not an employee i personally would air on the side of caution and not do it.

However if the company sec is an employee of the company then HMRC states one mobile phone per employee is allowable.