I am a company Director and occasionally use my home telephone for business calls. What is the tax position? Are there any other issues surrounding telephones? For example where the company provides me with a mobile phone or installs a second telephone line into my home as a dedicated business line. Where you contract to pay the telephone provider direct then for income tax purposes, for directors and employees earning more than £8,500 per annum the sum is reported on form P11D under section B and for National Insurance purposes the amount should be added to the other earnings and Class 1 payable on the amount. Where you contract with the telephone provider and the company reimburses the sum to you then for income tax purposes for directors and employees earning more than £8,500 per annum the sum is reported on form P11D at section N. For national insurance purposes there is nothing to pay. You may then wish to make a claim for employment expenses in relation to the costs incurred on the business calls made. No amount can be claimed for the line rental. Where a second telephone line is installed in your home to provide a dedicated business line, the provision can be wholly exempt. The exemption applies where the company subscribes for a line installed in your private home and the following applies where there is a clear business need for the employer to provide the employee with a telephone, for instance if making and receiving telephone calls from the home are vital and a central part of your duties, the employer has procedures to monitor, control and minimise the cost to them of private use and the employer has no intention of rewarding the employee. The company may control and minimise the cost of private use by either recovering from the employee the cost of private calls or ensuring that the cost of any private calls is kept to a minimum, for instance only allowing the employee to make local or off peak calls in clearly defined circumstances. If the former applies only the benefit of the telephone line will be exempt. The benefit of the calls, both business and private will not be exempt. Both the line and the calls may be exempt if the cost of the private calls is not significant compared to the total costs of the line and calls, however the company will need to ensure that this is monitored. The provision of one mobile phone to a director or employee is exempt from charge, the charge to tax and consequently no benefit in kind charge arises. The exemption covers the telephone itself, any line rental and the cost of private calls paid for by the employer on that telephone. Smartphones now fall within the meaning of ‘mobile phone’. If you need any further information please call us on 01455 852550.