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HMRC has updated its view on the interpretation of ITEPA 2003, s 319, which defines a mobile phone for benefits in kind purposes.



ITEPA 2003, s319 provides exemption from income tax where an employee or company director is provided with a mobile phone, without transfer of ownership, by their employer. 
Smartphones were previously excluded from the definition of mobile phones as HMRC viewed them as being mini-computers, rather than mobile phones.  HMRC have now changed their view on this and smartphones are now included within the definition of a mobile phone.
HMRC’s revised view opens the door for:

  • employers to submit revised forms P11D/P11D(b) for 2007/08 onwards
  • employees/directors to submit revised self assessment tax returns and/or claim a repayment of tax for 2007/08 onwards.

This is a very welcome announcement from HMRC; not only in terms of content but also in terms of its timing, i.e. just prior to the start of ‘P11D season’.