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mobile phone allowance to employees ?

We are considering giving some of  our employees, only the ones who use a mobile for business, a set  payment every month to cover the business costs of using their personal phones, Approx £15 a month nett. Will this payment attract  PAYE tax and NI  and therefore does it have to go through the payroll ?

Any advice would be appreciated ! Thanks

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It depends

The mobile phone exemption that Yvonned is referring too isn't relevant if you're reimbursing for business use of the employees' personal phones, but it's worthwhile thinking about as an alternative to what you're proposing.

If you're reimbursing actual expenditure, supported by itemised bills, then there's no PAYE/NI, but it will need to be reported on P11Ds if you don't have a dispensation.  You'll encounter the perennial "call allowance" debacle though.

If you're making a round sum allowance, it's taxable/NICable as pay.

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27th Jul 2012 12:13

thanks steve, although i have not yet looked at the link sent by yvonne.

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