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Personal use of company mobile phone

How to charge employee for personal use of company mobile phone.

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We have an employee who has racked up large amounts of data charges by streaming videos in his bedroom where there is no wifi access.   Don't ask. 

This is on a company provided mobile phone.  The cost of the additional data way exceeds the cost of the mobile plan. 

He has offered to pay for the cost of this data and has promised to stop whatever it is he is doing that is incurring the costs. 

My question is can we just send him an invoice or is the cost of the personal data taxable instead?     We do payroll taxable benefits, but I have not requested to payroll phone costs for this financial year so I guess I may have to do a P11D instead at the year end - if it needs to be taxed rather than just invoicing him for the cost. 

Any advice please?
 

Thanks 

 

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05th Jul 2019 09:32

Hmrc guidance says " Private call charges over the monthly phone tariff
Deduct and pay Class 1 National Insurance and PAYE tax through payroll. There are no additional reporting requirements."

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to lesley.barnes
05th Jul 2019 10:01

Disagree - if the phone is a company one, where phone contract is between the company and provider directly, as it sounds like from the OP, then there are no taxable benefits.

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05th Jul 2019 09:33

I'd invoice him - don't forget to account for VAT on the amount charged.

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to paul.benny
05th Jul 2019 09:45

So would I.

Accept his generous offer.

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05th Jul 2019 10:05

On the basis that the contract is between the employer and the phone provider directly (and only one phone has been provided to the employee), then any costs incurred by the company on private use is not taxable on the employee - no P11D etc reporting is required.

Agree that just recover the costs from the employee.

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05th Jul 2019 10:33

Id send a bill "five finger shuffle in hotel room, £100 data costs+ £35 admin"

And if its not paid by pay day, lop it out of his net pay.

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By ms998
to ireallyshouldknowthisbut
05th Jul 2019 14:00

Just in case you were being serious you can't just deduct pay from an employee because you feel like it. There are only certain categories of deductions you can.

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to ms998
11th Jul 2019 11:48

Well, in this case you can.

Because the employee has offered to pay.

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05th Jul 2019 10:34

Would depend on whether the costs were significant or not and what the contracts say. The details we have suggest they were significant.

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05th Jul 2019 14:04

Since the employee is reimbursing the employer for the additional data, will there be a taxable benefit at all since the employer won't actually have incurred any cost? Might be different if the employer bore the cost.

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to neiltonks
05th Jul 2019 15:16

it's already been established that there probably is no benefit in kind, depending on the facts.

its not a question of BIK, its a question of reimbursing the employer for personal costs that you weren't entitled to incur.

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05th Jul 2019 15:31

There's a packet gag in here somewhere, but I just can't be arsed today.

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11th Jul 2019 09:59

Guess you guys have never heard of Netflix and the like?

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11th Jul 2019 11:07

If the company invoices the employee for excess phone charges and the employee pays up, there is no need to do a P11D. If the company pays the phone bill and does not invoice the employee, there is a BIK which needs to go through the payroll or on a P11D. The first option is much simpler. Don't forget the VAT though.

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to john hextall
11th Jul 2019 11:30

I disagree, there's no BIK either way. As has already been stated earlier in the thread.

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to john hextall
11th Jul 2019 11:46

As has been said, if the phone contract is with the employer, any benefit in kind is exempt. Subject to the need for the employer to be reimbursed (with VAT consequences), that is actually the simplest option.

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By ColA
11th Jul 2019 15:08

Never understood in a family company how a favoured employee racked up roaming charges for his company mobile phone on his 14 day holiday to Cuba but was never asked to reimburse the company.
Mind you he was the highest paid telephonist I have ever dealt with - perhaps his use to the directors was virtual!

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to ColA
11th Jul 2019 15:14

ColA wrote:

Never understood in a family company how a favoured employee racked up roaming charges...

Is it because he was favoured ?

Just something that crossed my mind as a possibility ....

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11th Jul 2019 19:07

No P11D requirement, its not a taxable benefit.

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