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HMRC internal manual

National Insurance Manual

Class 1 NICs: Expenses and allowances: Telephone expenses: Telephone acquired solely for business purposes

This is only appropriate where it is established that the telephone was installed solely because it was needed for the business and that no private calls are made.

Business calls are, of course, excluded under the above legislation.

See NIM05020 for general guidance regarding what constitutes a business expense.

If the employer is the subscriber Class 1 NICs will not be due because the provision of the telephone will be excluded as a payment in kind by virtue of regulation 25 and paragraph 1 of Part II of Schedule 3 to the Social Security (Contributions) Regulations 2001 [formerly regulation 19(1)(d) of the Social Security (Contributions) Regulations 1979].

It is unlikely that a Class 1A NICs liability will arise where the installation was solely for business use and it is not used for private calls or the private use is insignificant. But see NIM13000 for general guidance on the principles regarding Class 1A NICs liability.