Contact Us

PAYE tax and National Insurance Contributions are due if you reimburse the cost of the mobile telephone, service charges, the cost of private calls, or provide the employee with a voucher for use in relation to the mobile telephone or private calls made on it.

Where you only 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 and Customs. This will avoid the need to report the payments on the end of year form P11d for each employee. If you do not have a dispensation you must return the full cost on form P11D at section N.

No Class 1 or Class 1A NICs are payable on this expense payment, but the employee will have to pay income tax on this payment. However, as the calls were incurred for business they can claim tax relief against the payment, either on a Self Assessment tax return, or a form P87 if they are not required to complete a tax return.

An alternative option you have is to provide these employees with a mobile telephone and enter into a service agreement with the telephone company as there is no liability for NICs or tax. This applies to the provision of the telephone, the service and all calls made, including personal calls. However, you must ensure there is a restriction to one mobile provided per employee, as the exemption only applies to one mobile phone and does not extend to members of the employees’ family or household.

Date published 5 Dec 2012

This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

Choose the right accounting firm for you

Running your own business can be challenging so why not let TaxAssist Accountants manage your tax, accounting, bookkeeping and payroll needs? If you are not receiving the service you deserve from your accountant, then perhaps it’s time to make the switch?

Local business focus icon

Local business focus

We specialise in supporting independent businesses and work with 80,684 clients. Each TaxAssist Accountant runs their own business, and are passionate about supporting you.

Come and meet us icon

Come and meet us

We enjoy talking to business owners and self-employed professionals who are looking to get the most out of their accountant. You can visit us at any of our 409 locations, meet with us online through video call software, or talk to us by telephone.

Switching is simple icon

Switching is simple

Changing accountants is easier than you might think. There are no tax implications and you can switch at any time in the year and our team will guide you through the process for a smooth transition.

See how TaxAssist Accountants can help you with a free, no obligation consultation

0800 0523 555

Or contact us