How to tax employees home telephone reimbursed ?? | AccountingWEB

How to tax employees home telephone reimbursed ??

According to HMRC if an employee is reimbursed for their home telephone (contract between employee and phone company) the amount reimbursed must be added to the employee's other earnings and is subject to deduction of PAYE and NI using your usual payroll procedures.

If a limited company reimburses an employee (whom owns the company and is the only employee) 50% (treated as business use proportion) of their home telephone bill the company will look to record this payment as a 'telephone' expense.

If the 50% reimbursed is then added to the employees salary and included in the net wage calculation then the employee is effectively receiving reimbursement twice which clearly can't be correct.

So therefore should the reimbursement previously paid to the employee and treated as a 'telephone' expense by the company be deducted from the net wage payment to the employee with the net amount being grossed-up through the payroll ?? would then the gross amount be the value reported by the company as telephone expense ??

There doesn't appear to be any specific guidance from HMRC on the actual logic of this and I just can't seem to get my head around this one.



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eve2206 |
eve2206's picture

Home telephone would not usually be covered by use of home

pdorrington |

My understanding is that you

sparkler |

PAYE instructions

Marion Hayes |
Marion Hayes's picture

Sorry, I did get a bit

eve2206 |
eve2206's picture

Reimbursement to employee should be subject to PAYE

pdorrington |