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Mobile phone and P11D

Mobile phone and P11D

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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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By JCresswellTax
30th Jun 2015 13:42

Pecunary liabiltiy

Nowhere near Class1A nics.

Well maybe it is, seen as it is class 1 :)

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By KungFuKipper
30th Jun 2015 14:06

I hate it when......
I'm having one of those days when I don't even understand the jokes!!

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By JCresswellTax
30th Jun 2015 14:12

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.

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7om
By Tom 7000
06th Jul 2015 17:49

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

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By JCresswellTax
07th Jul 2015 09:16

Hopefully

Tom 7000 wrote:

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....

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By aland
07th Jul 2015 12:57

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.

 

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