If you reimburse the cost of the calls, or any other related costs such as the service charge, by increasing the employees' wages, tax and Class 1 National Insurance will be charged. Equally if you provide the employee with a voucher for use in relation to the mobile telephone or private calls made on it, PAYE should be applied to the associated cost.
Where you reimburse the costs incurred by an employee in making business calls only on his or her own mobile telephone, you can ask for a dispensation from HM Revenue & Customs. If you do not have a dispensation in place, you must return the full amount reimbursed on the year end form P11D. This will not give rise to a National Insurance liability, however the employee will be taxed on the value of the reimbursement. The employee can then apply for tax relief on the assessable amount, by making a claim to HM Revenue & Customs stating that the payment is for expenditure incurred in the course of their employment. This claim can either be made on a self assessment tax return, or by completing form P87.
You may wish to consider providing your employees with mobile telephones, having the service agreements with the telephone company in the name of your business. Mobile telephones are not a benefit in kind fo tax purposes and therefore there would be no liability for tax or National Insurance on the cost of providing the telephones, even if they are usd for private calls too.