Mobile Phones

Mobile Phones

Didn't find your answer?

Client company, two directors, husband and wife. Husband is main fee earner, Wife is in admin role. The wife is paid a small salary (around £2k per annum) which is realistic for her duties, the husband around £12k, and balance of profits as dividends 50:50.

Client is aware of the possible problems, especially from April 2008, of income sharing in this way.

However, is it possible for the company to provide a company mobile phone to both directors in their own right as employees of the company, and have both exempt from BIK charge.

The IR website seems to mention a specific removal of the exemption when the phone is provided to the employees family or household, but does this only cover when the spouse isnt also an employee of the company?
G

Replies (1)

Please login or register to join the discussion.

avatar
By User deleted
30th Jan 2008 18:30

Transitional rules
Phones per household: The way I read it is that if your client was always provided with 2 or more phones and you have not changed the contracts or phones since the rules change then the existing phones stay under the old system.
If you hand out further phones after the change over, then they fall under the new rules.

Phones to members of your family who are employees:There is the possibility that HMRC might find the benefit of a phone excessive for the employee concerned, possibly unlikely as in this day and age they are cheap as chips, so to speak. It could try and challenge on these grounds and then try to assess the husband for wife's phone.

To avoid all this mess you could provide the husband with a PDA (i.e. a blackberry) which if he needs one for work is tax free as it is classed as a computer) and you could give him a phone (tax free, one per household). He could lend this to his wife if she was that desperate.

However, there is a really really easy way round it, and that is that the wife just buys herself a pay as you go phone and no one has to worry about tax or accountant's fees or anyone's time.

Thanks (0)