HMRC has revealed it is to now classify employer-issued smartphones as mobile phones; five years after the gadgets came onto the market.
Previously, when employees were given the devices for work purposes, HMRC had classified them as personal digital assistants (PDAs), rather than as mobile phones. The department has now accepted that the hi-tech phones satisfy the conditions to qualify as 'mobile phones'.
HMRC was however careful to point out that not all gadgets offering telephonic functionality will automatically be treated in the same way; with specific conditions needing to be met in order to fall in to the mobile phone category.
Employers, who are affected by the classification change, will now be able to reclaim any National Insurance Contributions backdated as far as 2007/08, provided only one phone was issued to the employee and the circumstances do not fall into the exemptions outlined in section 319 of the Income Tax (Earnings and Pensions) Act 2003.
As a rule of thumb, HMRC has stated that PDAs, tablets and laptops 'using Voice Over Internet Protocol ('VOIP') systems to make and receive phone calls will not satisfy the primary purpose test'.
0113 815 1315
15 Queens Square, Leeds, LS2 8AJ