Employees who are given smart phones by their employers will no longer have to pay tax or national insurance contributions (NICs) for them, HM Revenue and Customs have said in new guidance.

Previously, smart phones were only exempt from tax if they were provided by the employer solely for business purposes. This tax exemption was, therefore, unlikely to apply to everyone.

Employees who have in the past paid tax and NIC’s can make a claim for a refund of any tax and NIC paid to date. The change is good news for employees as it means there’s no tax or NIC to pay on their first work mobile phone, regardless of how much the employee uses it privately.

However, HMRC has said the tax exemption applies only to devices primarily designed for voice communication and specifically says mobile devices that only provide Voice over Internet protocol (VOIP) – a technology for making free or cheap calls over the Internet – will not qualify.

This means that tablets and other similar devices will remain subject to the old tax rules.

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Ben Storey

Courtley West