Confused about Mobile Phone and Computer Benefit in Kind

dfarry

I have heard about these becoming benefits in kind, but with P11D's due to be issued soon I thought I would try to find out more....

I am totally confused.

My situation is that I work for a very small company, they provide me with a laptop (cost £1000 last Nov.) and a mobile phone which is my own/contract with 6 months remaining. I generally bring the laptop home and inevitably use it for check email etc. but it's main purpose is as my business computer.

Likewise the phone is only used for business really, and more so that others can contact me.

Apparently I will be liable to tax on the phone as it is my own and is reimbursed by the company.... I can't see how this is fair... my employer still accepts the cost and would be similar (if not more) if they had owned the phone/contract themselves. How would the amount of tax liability be calculated?

I have not been able to find anything at all about the computer liability again how would the amount of tax be calculated? If I were to leave the laptop at my place of work over night would the benefit in kind still exist? If not then I might do that. Alternatively what if the company were to sell the laptop to me would I still be liable for any tax then?

There are half a dozen or so of us that are in the same situation so I would really appreciate any advice.

Thanks

Elaine_Wilson

Confusion is not unusual in this area. I'm not sure I'm clear on the position in many cases.

Let's start with the mobile phone. This is relatively straightforward. As you say this is a private contract then the reimbursement from the company must be treated as a benefit in kind. You will be taxed on the amount reimbursed.

Now the fun bit. You use this phone for business. Why? Is it a requirement of the job? If I were to replace you would I have to do the same? You see, you can claim relief on expenses incurred "wholly, exclusively and necessarily" in "the performance of your duties". (I think the wording may have changed slightly in the recent rewrites of the legislation but the meaning has been retained) There seems a good chance you can satisfy this requirement so you can claim for the expenditure which cancel the tax paid on the benefit. Enter it on page 2 of the employment supplement.

Now for the computer. There should be no benefit if the private use is "incidental" to the business use. If your private use is only to pick up private e-mails then you should not have a problem. If you have more extensive use then I believe the intention of your employer would come into play. If the computer is vital to your job, and it is in fact used as such, then I believe the amount of private use is immaterial. It can still be considered incidental.

The rules were changed to catch the situation where the computer is provided primarily for private use with a little bit of business use thrown in to legitimise it. In those cases the business use was not really necessary, i.e. the job could have been done without it.

dfarry

Elain, many thanks for your advice... it certainly makes more sense in this way.

I will feed this information as it at least gives us something to look at and ensure we are only paying the tax that is necessary and fair.

Cheers

DAN