Expenses and benefits: mobile phones

What to report and pay

If telephone expenses aren’t exempt, you must report them to HM Revenue and Customs (HMRC) and may have to deduct and pay tax and National Insurance on them.

Some mobile phone expenses are covered by exemptions (which have replaced dispensations). This means you won’t have to include them in your end-of-year reports.

If you provide more than one phone to an employee

One of the phones is exempt from paying and reporting, but any other phones count as assets.

If your employee arranges the phone but you pay the supplier

You must:

The employee uses their own phone and you reimburse them

If you only reimburse the monthly phone tariff, deduct and pay Class 1 National Insurance and PAYE tax through payroll. There are no additional reporting requirements.

Private call charges over the monthly phone tariff

Deduct and pay Class 1 National Insurance and PAYE tax through payroll. There are no additional reporting requirements.

Business call charges over the monthly phone tariff

You must report the amount on form P11D. You don’t have to deduct and pay any tax or National Insurance.

Your employee has a ‘pay as you go’ mobile and you reimburse them for business calls

You must report the amount on form P11D. You don’t have to deduct and pay any tax or National Insurance.