Like millions of other people, I have a company mobile phone/PDA/Blackberry device. Last year my employer offered to install a hands-free kit in my (privately-owned) car. I accepted, but when I changed cars 9 months later didn't bother installing a new one in the new car. (Range of reasons).
Now, the tax office are giving the impression to my employer that they see these devices as taxable and will want some tax money from me?!
How can a safety device be taxed as a benefit? What is the UK Government up to?! Or am I just out of touch and you are all being taxed for similar devices?!
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There was some publicity about this last year I think, whereby IT orientated stuff supplied by a company and used for personal reasons could be deemed taxable. Mrs PU knows far more about this sort of thing. Will ask her later for you ( I don't want to distract her now !!!)
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PU, the mind boggles..........
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2007 Seat Altea XL 2.0 TDI (140) Stylance
2005 Skoda Fabia vrS
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She is ironing his shirts.
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< Ex RF, Ex TVM >
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Lets get some things in place.
1/ A hands free kit is NOT a safety device.
2/ NO employer can force you to take or make phone calls while you are driving your car.
Therefore this is not a required tool of your job, nor is it an item of safety and If provided by your empoyer for free it has to be a benefit.
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< Ex RF, Ex TVM >
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From the horses mouth.
Hands-free kit fitted in an employee?s own car
On general principles, the provision by an employer of a hands-free kit fitted in an employee?s car is chargeable under the benefits code. However, as long as the employer retains ownership of the kit installed in the employee?s vehicle, there is no benefit charge.
If, on the other hand, the employer buys the kit and transfers ownership to the employee there will be a benefit charge if the transfer is made at other than market value.
If the employee buys the kit and retains ownership but the employer reimburses the cost to the employee, the reimbursement represents earnings chargeable.
Hands-free kit fitted in a company car
Where an employee is provided by his employer with a car, the hands-free kit is an accessory and would normally be included in the price of the car for tax purposes. However, Section 125(2(d) ITEPA 2003 specifically excludes a mobiles phone within Section 319(2) from being an accessory. So there are no benefit implications at all where a hands-free kit is fitted in a company car.
There are also no benefit implications if an employee buys the kit and fits it with the employer?s permission.
However, if the employee buys the kit and retains ownership and the employer reimburses the cost to the employee, the reimbursement is again treated as earnings.
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Bit harsh, Altea. Reality check: phone will ring and you need to answer it if you're travelling on work time and someone (senior?) at work wants to get hold of you, for example. Hands-free is a safety device, and a legal requirement at that. How on earth is it a perk or a benefit?
Do you drive during work hours? And if so, do you go hours at a time stuck in a jam somewhere, incommunicado, not phoning the client to let them know you're delayed, for example?
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Bit harsh Altea. Reality check: phone will ring and you need to answer it if you're travelling on work time and someone (senior?) at work wants to get hold of you for example.
1 - Tough. Your boss can not insist, under health and safety at work, you answer his call while driving.
> Hands-free is a safety device
No its not.
>and a legal requirement at that.
Thats all it is, Its NOT a safety device. Indeed its recognosed as a safety hazzard. See point 1
>How on earth is it a perk or a benefit?
Because its not a safety device. It costs money and is therefore a benefit.
Do you drive during work hours?
20k business miles a year
>>And if so do you go hours at a time stuck in a jam somewhere incommunicado
yes
>>not phoning the client to let them know you're delayed for example?
I find somewhere to stop and phone from there. I also answer the voicemessages on my phone that I didnt answer because I was driving. Thats what voicemail is for.
Oh and BTW do you take and make personal calls on your company supplied phone? I hope you pay for them or that is a taxable benefit as well.
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< Ex RF, Ex TVM >
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I used to do 50k miles a year. When mobiles were introduced, with handsfree installations, it was accepted to leave the phone turned off and pick up any messages and make calls when having a rest/refuel stop. Even with the best handsfree kits, using a mobile when driving is distracting, no matter what people may say - a number of times I missed my exit junction while trying to tell someone how to reinstall unix whilst on the phone.
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It can't be essential in the OP's case as he's decided not to have one fitted to his new car.
How much tax are we talking about here - it can't be significant? Anyway, get your employer to pay the tax bill.
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We are meant to get car kits if we have a company phone. Is it a benefit? Maybe it is. As for personal calls we have to pay for all of them and therefore do not get taxed for the "benefit" of the phone. Calls are quite cheap too - calling USA is cheaper than a BT landline!
Another benefit we get is contribution to broadband. This is paid via payroll and the amount increased to ensure we get the 50% contribution after being taxed.
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taxed for the "benefit" of the phone.
Phone benefit tax was stopped *years* ago!
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But you have to pay back for personal calls! I put "benefit" in quotes because of the fact the tax was removed.
We as a company probably have more than 5000 company mobiles and possibly nearer double that (all with internal extension numbers and ability to dial internal extensions). We also get very cheap calls. But for personal calls we have to mark them and pay back via payroll. Having said that I typically have less than £10 of calls per month at most (e.g. when on holiday) and I use the mobile more than a landline ;-)
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But for personal calls we have to mark them and pay back via payroll.
The admin cost of doing that doesn't bear thinking about! Do the office based people have to pay for their personal calls too?
Having said that, there's always people who take the mickey - we allowed 'reasonable' personal use of mobiles but some people have no idea what 'reasonable' means and were sending 1000texts per month and others were calling abroad for hours at a time.
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