IR7

9 March 1999

BURDENSOME TAX CHARGE ON MOBILE TELEPHONES LIFTED

Employees will, from 6 April 1999, no longer have to pay a tax charge
when provided with mobile telephones by their employers, announced
the Chancellor today.

Exempting this benefit will remove a significant compliance burden
from 350,000 employees and their employers.

DETAILS

1. Since 1991-92, where an employer provides an employee with a
mobile telephone which is used for private calls, the employee has
had to pay tax on an annual scale charge of #200. This has imposed an
unwelcome record keeping and reporting burden on employers.

2. Employees could escape liability if they made no private use of
the mobile telephone provided or they were required to reimburse the
full cost of any private use and did so. But that imposed further
unwelcome compliance burdens on employees and employers.

3. The Inland Revenue will alter PAYE codes in May this year to
remove the tax charge on mobile telephones. Employees and their
employers need take no action themselves.

4. The cost of this exemption will be #25 million in 1999-2000.

INLAND REVENUE PRESS OFFICE
Media enquiries to:0171 438 6692/6706/7327 
(Out of hours:0860 359544)

Non-media enquiries to: 0171 438 6420/6425 (Office hours only)

Inland Revenue information is on the Internet:
www.inlandrevenue.gov.uk

# = pounds sterling