29 Nov
Is there any advantage to the company paying for all our mobile phones?

Employees using mobile phones

Q. My wife and I are directors of a small company. Our two children also work for the company. Is there any advantage to the company paying for all our mobile phones? 

A. The tax legislation provides exemptions from tax, and often National Insurance Contributions, for certain benefits-in-kind - mobile phones being one of them. Making use of the exemptions generally offers an opportunity to extract funds from a family company without triggering a tax or NIC charge. Providing the benefit rather than the funds with which to buy the benefit saves tax. The costs are also deductible in computing the company's profits.

So, if the company takes out a contract for four mobile phones, provides each family member with a phone, and pays the bills, the costs paid by the company will be deductible in computing taxable profits. The family members get the use of a phone tax free, meaning that they do not need to fund one from their post-tax income. 

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