NIC on directors telephone

NIC on directors telephone

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Where a company pays a directors home tel and the co' puts this thro' the accounts as an expense, is NIC chargeable on the director as earnings as well as the normal class1a? Would the situation be diferent if the tel was charged to his Dirs loan acct Iin very healthy credit)
WR

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By User deleted
13th Dec 2004 19:20

Telephone
My understanding is:

If the bills are in the individuals name then class 1 NIC applies. PAYE would I think also apply and the individual would need to make a claim under what used to s198 ICTA to get tax relief for the business element.

This can be avoided by debiting to the directors loan account. The director can then claim for the business element which should be credited to the loan account.

If the bill is in the company name there are no class 1 implications. However, class 1a is payable on the private element, unless the private element is debited to the loan account.

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By NeilW
14th Dec 2004 15:01

Gory Details
Gory details on telephone expenses are here:

http://www.inlandrevenue.gov.uk/employers/ebik/ebik2/telephones.htm

NeilW

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