Expenses and benefits: home phones
What to report and pay
If telephone expenses aren’t exempt, you must report them to HMRC and may have to deduct and pay tax and National Insurance on them.
Some telephone expenses are covered by exemptions (which have replaced dispensations). This means you won’t have to include them in your end-of-year reports.
You arrange and pay for the phone
You must:
- report the cost on form P11D
- pay Class 1A National Insurance on the cost
Your employee arranges the phone contract but you pay the supplier
You must:
- report the cost on form P11D
- pay Class 1 National Insurance through your payroll
Your employee arranges the phone contract but you reimburse them
This counts as earnings so you must:
- add the amount you reimburse to the employee’s earnings
- deduct and pay Class 1 National Insurance and PAYE tax through payroll