HMRC internal manual

Employment Income Manual

EIM21780 - Particular benefits: mobile telephones: general overview

Section 319 ITEPA 2003

The exemption for mobile phones in Section 319 was substantially amended by Finance Act 2006 - see EIM21778 and EIM21779 for the revised rules for 2006/07 onwards.

The provision of one mobile phone to a director or employee is exempt from charge under the benefits code (see EIM20006). The exemption covers the telephone itself, any line rental and the cost of private calls paid for by the employer on that telephone.

For years up to and including 2005/06

Before 2006/07 the exemption only covered the tax charge under the benefit in kind rules in the benefits code. It did not cover other situations where a tax charge may arise in respect of a mobile telephone.

For example an employment income charge still arose if:

  • the employer reimbursed the employee for calls made on their own mobile telephone (see EIM00580), or
  • the employee could give up the telephone and get a higher cash wage or salary (see EIM00570), or
  • the employer provided a voucher (see EIM16000 onwards) for a mobile telephone or for calls.

Definition of a mobile phone before 6 April 2006

Equipment (including equipment installed in a car) that could be used to transmit spoken messages and that was not connected to a land-line.

Cordless and telepoint telephones were specifically excluded because of their close dependence on land-lines.

The definition of a mobile phone is revised for 2006/07 onwards - see EIM21779.

Personal Digital Assistant (PDA)

For information on Personal Digital Assistants, see EIM21701.


For information on smartphones see EIM21779.

Hands free mobile telephone kit

See EIM21781.