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
Replies (3)
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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.