BIK on Mobile Phone

godtabh

Our company gives us a €500 budget for a mobile phone and a company issued sim. We are allowed to claim the €500 every 3 years.

I bought a phone and put the expense claim in. I was told I am not allowed to claim it on expense. It goes into salary and I get taxed on it.

That doesnt seem right? I wouldnt have spent €500 if I though I wouldnt get it back as I have my own personal phone.

duffysfarm

taken direct from the revenue website;
"Telephones or mobile phones
If you pay your employee’s home telephone bill or mobile phone bill, this may be a benefit-in-kind. The value of the benefit is 50% of the bill (including line rental). If your employee proves that less than 50% of their phone use was private, the value of the benefit is reduced proportionally.

You may provide a dedicated home telephone line or mobile phone to an employee specifically for business use. This is not a benefit-in-kind where private use by your employee is minimal.

You must keep records of how you calculated the value of the benefit if it is less than 50% of the bill."

in practice i have never seen bik on mobile phones. It seems as if your company has changed their policy but failed to inform employees of the change. At the same time i dont think they have made the correct change and could be challenged on it but i dont think the €500 allowance was ever correct.

DmanDmythDledge

Doesn’t sound like a change in policy, I don’t see how giving any employee €500 to personally buy a phone would be exempt from BIK.

godtabh

DmanDmythDledge wrote: »

Doesn’t sound like a change in policy, I don’t see how giving any employee €500 to personally buy a phone would be exempt from BIK.

It’s to buy a work phone for company use. As I have my phone I wouldn’t have thought bik would apply

duffysfarm

DmanDmythDledge wrote: »

Doesn’t sound like a change in policy, I don’t see how giving any employee €500 to personally buy a phone would be exempt from BIK.

the employees were originally given €500 to buy a phone with no tax implications (not saying if this is right or wrong). Now they can put this through as an expense claim but will be taxed. This to me is a change in policy or maybe you can explain it better to me?

godtabh

I was given a Samsung S5 in 2014. I’ve had the same phone since then. There used to be a policy that you got an upgrade via the mobile provider (paid for by the company) but this changed as people were giving out about the phones they got. The 500€ came in a couple of years ago but I never took it up.

Change for the 50% BIK/tax has only come in in 2021

DmanDmythDledge

godtabh wrote: »

It’s to buy a work phone for company use. As I have my phone I wouldn’t have thought bik would apply

Ultimately it’s a phone owned by you which is the way Revenue would look at it. I assume you’re the registered owner? Work would cover the monthly billing I assume if providing a sim but the cost of the phone wouldn’t be included in that cost.

duffysfarm wrote: »

the employees were originally given €500 to buy a phone with no tax implications (not saying if this is right or wrong). Now they can put this through as an expense claim but will be taxed. This to me is a change in policy or maybe you can explain it better to me?

I’d call it applying payroll taxes properly but it’s something the company should have communicated as employees obviously wouldn’t have been expecting it.

It’s possible the company may have thought it was covered by the small benefit exemption but that doesn’t apply to benefits provided in cash.

duffysfarm

I’d call it applying payroll taxes properly but it’s something the company should have communicated as employees obviously wouldn’t have been expecting it[/quote]

Yes, i see what your trying to say now. They should have communicated their change in policy better.