A client was advised to run his mobile phone contract through his company. He transferred the direct debit but didn't swap it to his company's name. It's P11D benefit time and it seems this should be liable to section 1A NICs....is this correct or could he put in an expense claim and/or just treat it as a company phone?
This might be one of those examples where practical experience trumps reading of the rules....
Cheers,
KFK
Replies (6)
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Haha - sorry
This is the company paying a personal expense of a director.
No different to buying his shopping or his boxers shorts.
Correct treatment is to run through the payroll for class 1 nic, employers and employee's then put the taxable amount on the P11D to be taxed.
You can't split the tariff charge between business/private use, only the call charges.
So unless this is 100% business use, the easiest thing to do is to take the costs to the DLA and forget about it for P11D purposes.
have you considered
allocating all the payments to his directors loan account....the same as you would if he bought tennis raquet and a bottle of suntan cream? Anywhere else creates a larger tax bill...
40-15
Hopefully
allocating all the payments to his directors loan account....the same as you would if he bought tennis raquet and a bottle of suntan cream? Anywhere else creates a larger tax bill...
40-15
As it was in the final paragraph of my last reply....
DLA
I suspect not everyone realised what DLA referred to. It took me quite a while to work it out.
The advice to run the mobile through the company was good as no P11D benefit arises, but HMRC do insist that the contract is in the company name.