HM Revenue and Customs (HMRC) have accepted that smartphones supplied by employers are not computers and thus a 2006 statement of practice that these would be subject to the benefits in kind regime that applies to computers is not applicable.



Employers who have supplied such devices and paid Class 1A National Insurance Contributions (NICs) as a result may be able to claim refunds going back (if applicable) to 2006/2007. HMRC may assert that the ‘four-year’ rule on restriction of refunds applies, but since this is an error in their interpretation of the law, pressure should be put on them to refund in full.



The change in treatment does not apply to other ‘smart’ devices such as iPads and other tablet devices. Also, the exemption only applies to the first mobile device supplied to each employee. Where more than one is supplied, a benefit in kind does arise.



To claim repayments due, employers should apply in writing to HMRC by way of a brief covering letter headed ‘Employment income: mobile phones exemption – smartphones’ and include the following information for the tax years affected:

• The names and National Insurance numbers of the affected employees;
• For each affected employee, confirmation of the smartphone benefit reported on form P11D;
• Details of the make and model of smartphone;
• The calculation of the benefit;
• Confirmation of where this benefit was included on form P11D;
• The amount of Class 1A NICs payable as shown on the original P11D(b); and
• The revised amount of Class 1A NICs now payable after deducting the Class 1A NICs originally paid on smartphones.

Send this to: Customer Operations Employer Office, BP4009, Chillingham House, Benton Park View, Newcastle Upon Tyne, NE98 1ZZ.