Businesses warned over dual SIM mobile phones...

Posted by on 14 December 2011 | 0 Comments

Dains are warning businesses who provide their employees with dual SIM mobile phones that they should be aware of rules which could jeopardise a favourable tax exemption.

Employers can provide their workers with one mobile phone for private use as a tax-free benefit-in-kind (BiK), however this exemption only extends to one phone number.

A dual SIM phone where the employer can use both numbers for private calls will trigger a tax charge.

Andy McQuillan, Tax Partner at Dains said “We are urging employers to tell their employees to only use one of their numbers for personal calls.

“The other SIM should be reserved for business use only, meaning that the tax and NI exemption will continue to apply to the handset and the mixed use SIM, while there would be no BiK charge on the other because it’s not available for private use”.

Employers are being advised to formally put this policy in writing to avoid trouble with HM Revenue and Customs.

Alternatively employees may buy a pay-as-you-go (PAYG) SIM (UK or overseas) to load in the phone for when they want to make private calls without using the second SIM number.

If the company pays for the PAYG SIM, the taxable BiK will be equal to the cost of this, rather than for the full cost of the contract on the second SIM.

For more information please contact Andy McQuillan on 0845 555 8844 or email: tax@dains.com

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