Inland Revenue rules re. mobiles and travel - help understanding them

This sounds a bit suspicious to me as I can't see how a payg mobile is any less "suitable" than a contract mobile, as they both fulfil the job of making and receiving calls.

Also a contract mobile involves a *personal* credit check which is not always granted, so why do they not simply take the contract out in the

What your company allows you to claim on expenses is a matter between you and your company.

The IR would only be involved if the level of expenses your company paid you were such that you were effectively deriving an income from them. What you have to pay to get to work comes out of your taxed income, so anything you save by not paying it is not additional income.

I've never come across this in any company I've worked for. But I have come across similar, and not in the best situations.

If I were you, I'd take a very, very close look at your company's finances. That's the sort of policy companies tend to adopt just before they go bust.

Jon

It could well be deemed unsuitable by the employer because he couldn't really tell which calls were private and which work-related. This would be more possible with full itemised billing (which you don't get with PAYG, do you?). Further, the effort of studying bills in order to apportion private/business use is often unacceptable to employers, and so it makes sense for an employer to insist on the employee carrying a work-only phone.

That's not quite true. The company *could* in principle allow you to claim more than it costs them to satisfy the business purpose. Any excess over the true business cost would be considered by IR to be a perk, i.e. a taxable benefit in kind.

Quite. A benefit in kind *is* effectively such an income.

Would you like to rephrase that? It seems there is a spurious "not" in there.

Correct

Yes. If you can identify call charges which are clearly work-only, you can claim them. But it could get difficult to justify claiming a share of the standing charges.

There is no such thing as free minutes. But you can fix it so that if you pay all the standing charges yourself, that you apply the "free minutes" only to personal calls. They are, after all, part of the standing deal, and if you buy the standing deal personally, they're yours. So you can still claim the full cost of business calls before they are discounted by "free minutes".

No, unless you never use data services in a private capacity.

The normal cost of commuting between home and W is not allowable. If you travel to XYZ from W, that cost is allowable. But if for logistical reasons you happen to travel to XYZ directly from home, instead of going to W first, there could be a commuting element. It really depends on the distances involved. Certainly if XYZ is about as far from home as is W, or nearer, don't bother claiming. If XYZ is seriously further away from home than W, there should be no difficulty in claiming at least the cost of travelling from home to XYZ minus the cost of travelling from home to W.

According to the help for box 1.32 in the employment section of the tax return guide, you can claim the full distance from home to XYZ as long as it's not "broadly the same direction and broadly the same length" as your ordinary commute.

So if W is 50 miles south of home, X is 51 miles south, Y is 100 miles south, and Z is 50 miles north, AIUI you should be able to claim the full cost of travel to Y & Z from home, but probably not X.

This makes sense because you could have a season ticket/car share etc, so if you have to travel in the opposite direction from W, even the same distance (ie Z), that is additional cost. Even if you are travelling in the same direction, but further (ie Y), it could be that you need to drive to get to Y, rather than use you season ticket to get to W, so the full cost of the travel from home to Y is additional expenditure.

Your employer may have different rules to the IR, ie mine tries to get us to deduct our commuting cost from business travel costs, but then you can claim tax relief on the difference.

VAT receipt so the company can claim the VAT back? Itemised billing?

Exactly. This is so much simpler, if it's a company mobile then it's not a taxable benefit as long as you reimburse the employer for personal calls. Call costs are usually much cheaper on business contracts than personal ones, so you'd both gain.

Would not the vat invoice need to be made out to the company rather than the individual for a vat reclaim? A contract in the employee's own name would not achieve this.

Nope. I regularly put in expense claims for bills in my name or that I have paid (phone bills, hotel bills, restaurant bills etc). My company insists on a VAT receipt if possible so that they can claim the VAT back.

C&E operate a concession in respect of re-imbursed expenses etc, but this may be in violation of EU law. Agency may assist in certain circumstances - but unlikely if the supplier is unaware of it.

I guess the issue is you dont get itemised bills (indeed, any bills at all) and therefore cant prove your calls were business, or even how much you spent?

Thanks a lot for the replies.

I'm now pretty clear re. claiming for trips away from my home office.

Re. the mobile. Allow me elaborate. I work for an American firm with only 5 employees in the UK. A lot of the time it feels like you are working for yourself and this is reflected in their policies re. mobiles, share options, etc.

Using a personal mobile for work calls, having my company pay my bill and therefore having it considered a tax benefit, is of no advantage to me because I barely use my (PAYG) phone for private calls. This, however, is not the case for my colleagues who use their mobiles heavily. I have no real choice in the matter, but at least I wanted to find out what others thought, so thanks again.

One thing I'm still not clear on though, is what I will have to pay tax on; is it my line rental (including free minutes) or the total cost of my bill (which includes extras like reduced international dialing for my company's sake)?

Cheers, Richard

Tumbleweed wrote:

understand