Buying a mobile handset as an asset

[redgiant]

My old mobile handset is playing up (turning itself off and not picking up a signal when one is there). I'm on a 30days notice business contract with no upgrade options (O2 Simplicity) so i'd like to buy a handset outright and expense it back to the business an asset.

Is this possible even if the new handset is likely to be a smartphone as I think HMRC class them separately from regular mobiles?

[Clare@InTouch]

You're fine to put the cost of the handset plus the monthly charges through the company, as long as the contract is in the company name.

HMRC guidance.....

In most circumstances the provision of one mobile 'phone to a director or employee for private use is exempt from charge. The exemption covers the phone itself, any line rental and the cost of private calls paid for by the employer on that phone.

Personal Digital Assistants

Since the computer exemption was introduced in 1999, the number of devices that can conduct some functions normally associated with a computer has grown considerably.

A common example is the Personal Digital Assistant or PDA. Early versions of PDAs were little more than an electronic diary, but as the technology evolved some, such as the BlackBerry, had a primary function as a mobile phone. These early PDAs were exempt from tax under the mobile phone exemption in Section 319 ITEPA 2003 (EIM21780). That exemption continues to apply to these early PDAs. But the technology has developed to such an extent that PDAs and BlackBerrys now have additional functions more typically associated with a computer and so can no longer be considered primarily as a mobile phone.

Consequently where before 6 April 2006 an employer provided an employee with a PDA it was exempt as a computer under Section 320. Following the abolition of the computer exemption, from 6 April 2006 the provision by an employer to an employee of a PDA represents a benefit, unless the exemption in Section 316 applies

EIM21779 - Particular benefits: mobile telephones: exemption for 2006/07 onwards: details

Section 316 ITEPA 2003

There is no tax charge on the expense that an employer incurs in providing directors and employees, except those in an excluded employment (see EIM20007), with supplies and services that:

are provided other than on the employer's premises (e.g. employees who work at home or whilst travelling), and
are provided for the sole purpose (see EIM21614) of enabling the employee to perform the duties of the employment and
that the individual uses in performing the duties of the employment, and any use for the employee's private purposes is not significant (see EIM21613).

This exemption may cover the provision to employees of supplies and services such as for example:

office furniture and equipment such as desks, filing cabinets, fax machines etc
stationery and normal office or workshop materials and supplies
home telephone lines in some circumstances (see EIM21615)
computer equipment, (for computer equipment made available prior to 6 April 2006 see EIM21700), and in certain circumstances internet connection (see EIM21617), and mobile phones (see EIM 21778 -21781 for guidance about mobile phones made available for private use).

http://www.hmrc.gov.uk/manuals/eimanual/EIM21611.htm

[northernladuk]

<snip>

Christ, you got nothing to do today????

[Clare@InTouch]

Christ, you got nothing to do today????

It's one of those questions that I just know people will argue with if I just answer with 'yes', so better to pre-empt any question about a PDA definition before it starts. Plus, I just answered an email on the same subject!

[northernladuk]

It's one of those questions that I just know people will argue with if I just answer with 'yes', so better to pre-empt any question about a PDA definition before it starts. Plus, I just answered an email on the same subject!

Craig would have said 'Yes' and gone to the pub. Sorted.

[Clare@InTouch]

Craig would have said 'Yes' and gone to the pub. Sorted.

I know, but he's Northern. And a man.

Mines a pint or a mulled wine......

[redgiant]

Craig would have said 'Yes' and gone to the pub. Sorted.

That's where I sent the post from incidently

Thanks for the quick response Clare.

[northernladuk]

I know, but he's Northern. And a man.

Mines a pint or a mulled wine......

That will be a pint of shandy then??

That's where I sent the post from incidently

Top man!

[d000hg]

I know, but he's Northern. And a man.

Mines a pint or aof mulled wine......

FTFM

[Clare@InTouch]

FTFM

Now THAT would be a perfect way to end a Friday!