9. Communications and IT

9.2 Mobile telephones

(a) Definition

Mobile telephones are defined as portable communications devices, the primary purpose of which is the transmission and receipt of spoken messages via a public electronic communications service.

They may also have secondary data, computing or text facilities that do not exclude them from this definition.

A device that has significant uses or applications other than telephony is not considered by HMRC to be a telephone. Despite the name, an iPhone or similar 3g or 4g phone that also provides internet access, email, and software applications is not classed as a telephone but as a mobile computing device, similar to a PDA, Blackberry, iPod or similar. These should be treated in the same manner as PDAs or computers.

Associated costs include both those related to the equipment for accessing a network or service and the service charges for that access.

Mobile telephone costs The following are considered to be examples of mobile telephone costs:
Hardware	The telephone Hands-free sets and other accessories SIM cards
Services	Itemized call plans; Inclusive packages; ‘Pay and go’ and other top-up services

The following are NOT considered to be mobile telephone costs.

Exclusions to the definition of mobile telephones:

Fixed-line telephones, including wireless handsets which connect through a fixed base station;
VoIP (Voice over Internet Protocol) telephony, including Skype and similar services;
Two-way radio devices that connect privately rather than to networks;
iPhone, Blackberry or other forms of portable computer devices that provide applications / email / data / entertainment as well as voice and text services.

A flowchart is provided to help determine correct treatment of payments relating to mobile telephones.

(b) Mobile telephones provided by the University

Where a mobile telephone is provided and paid for by the University then it will be exempt from any tax charge only as long as the following circumstances apply.

Tax exempt mobile telephones provided by the University Either:
Business use telephones	the telephone is provided solely to enable the individual to perform their duties; and The telephone is used in performing the individual's duties; and Any private use or benefit is insignificant
Or:
Mixed or private use telephones	A single telephone is provided

To satisfy the business use exemption the telephone must be supplied under an itemized call package so that call usage can be monitored and, if necessary, private use be shown to be insignificant, i.e. less than 10% of total usage. Any number of telephones may be supplied to an individual on this basis.

Top-up packages, such as ‘Pay and Go’, and others that do not provide itemized call analysis cannot be claimed under the business use exemption even if they are used solely for business purposes. This is because it is not possible to show exclusivity of use. Telephones provided on this basis are limited to one per person.

Where telephones are provided to an individual with the purpose that they be passed on to others (e.g. to enable collection of research data in the field) then these rules will apply in respect of the recipients of the telephones rather than the person who distributes and collects them, i.e. the individual will not be deemed to have more than one telephone unless they use them directly themselves.

Where telephones are provided by the University that do not meet these rules then a taxable benefit will arise. See Appendix 4.

(c) Mobile telephones owned by individuals but used for business purposes

Where a mobile telephone is owned by a private individual, claims for reimbursement of costs from the University will only be exempt from any tax charge as long as the following circumstances apply.

Tax exempt mobile telephones not provided by the University:
Business use	The cost of itemized business calls only may be claimed, supported by a detailed, itemized bill

Un-itemized packages, top-ups, etc. may be claimed for personal mobile telephones at the discretion of the department, but this will give rise to a taxable benefit. See Appendix 4.