HMRC finally admits that a smartphone really is a mobile phone

More and more accountants are using smartphones and they will be pleased to learn that HMRC has finally decided to classify them as mobile phones, five years after they were first introduced to the market.

In the past, if an employer provided a smartphone for work purposes, the Revenue classified it as a personal digital assistant. HMRC now accepts that these hi-tech devices satisfy the requirements needed to qualify them as mobile phones.

However, HMRC has stressed that not all gadgets that offer a telephonic functionality will automatically be classified as a mobile phone. The gadget still needs to meet specific conditions.

Employers will be entitled to reclaim National Insurance Contributions dating back to 2007/08, providing that the employee was only issued with one phone and the circumstances of the issuance were not outlined in the exemptions of the Income Tax Act of 2003.

HMRC explained that laptops, PDAs and tablets that use Voice Over Internet Protocol for making and receiving calls would not fit the primary purpose requirement test.

Employers will no doubt be delighted that the Revenue has made this decision, but how long will it take before their NICs are refunded, and how many problems will they encounter during the process?

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