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Are you missing a tax break?

You could cut around a third off your mobile phone bill. UK businesses are missing out on £961 million of tax breaks every year by failing to claim government tax breaks and grants. That's according to new research by BT Home Computing.

The chancellor's announcement of a tax exemption on loaned computers five years ago went virtually unnoticed. But it gave birth to the Home Computing Initiative, a generous tax break aimed at improving computer literacy in Britain's workforce.

It's a straightforward idea. Your boss buys you a computer and any accompanying equipment for you to use at home. The cost is then deducted through your salary, usually over a period of a year to 18 months. You pay no tax or National Insurance on your repayments and so can make savings of up to 40%.

Flexphone

It was with this schemes in mind that accountancy firm BDO Stoy Hayward developed 'Flexphone', which they say could save families a third of the cost of their mobile phone bills.

Say for example an employee currently has a mobile phone bill of £50 a month. They can joins the scheme, selecting a mobile and provider of their choice, and choose to forego £50 a month of their salary. This is then paid for by the employer instead.

As a result the employee will get a tax break on the amount - 31% if they're a lower-rate income tax payer and 41% if they're a higher-rate tax payer. Furthermore, as the employer's contribution is not classed as salary, the company does not have to pay national insurance contributions on the amount. Winners all-round

Such schemes are a win-win situation for employer and employee. Organisations that take part in the schemes are usually satisfied by a boost in learning and motivation for their employees. But bosses can only use these schemes to unlock their workers' potential if they know they exist. And with no less than four government departments squabbling over who is responsible, it's little wonder take-up remains low.

To find out more about Flexphone email info@flexphone.co.uk or call 0845 408 2035.

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