Revenue brings mobile phone clarity

The clearest confirmation yet that mobile phone salary sacrifice is acceptable has been made by the Revenue.

In a letter to leading provider Flexphone the HMRC said that its scheme was effective for tax and NI purposes.

The letter also confirmed that where a company gives an employee a phone for business use alone, that employee can acquire another phone through the salary sacrifice scheme.

This would not apply, however, if the employer had already given them a mobile phone as a perk, rather than as a business essential. In this case, any second phone purchased would be ineligible for salary sacrifice.

Flexphone marketing manager Susan Quance said: “We had, some weeks ago, submitted a request for confirmation on behalf of a client, Isis Telecoms who has recently offered Mobile Salary Saver to its staff, that the scheme was effective for tax and NI purposes.

“As part of our submission we explained how Mobile Salary Saver works… and (gave) details of an employer who has signed up for the scheme.

“We also noted to HMRC that the employee also has a mobile telephone which is provided solely for business use. He is a pivotal decision maker in the company, needs to be contactable at all times and also works from home every week.

He does use his mobile phone for private use on occasion, but his use is insignificant as defined in the mobile phone policy.”

Furthermore the letter to the HMRC stated that the phone this employee would buy under the scheme would be provided solely for personal use.

In reply the HMRC stated: “I can agree that the Isis Mobile Salary Saver scheme launched on 1st August 2006 is effective for tax and NI purposes. I can also confirm that the provision of the mobile telephone packages under the scheme fell within the exemption in Section 319 ITEPA 2003 (as amended by Finance Act 2006).”

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