Claim tax refunds on a work iPhones, Blackberry or other smartphones – Money tip #167

 As revealed by the Daily Telegraph last week, smartphone owners could now be  in line to claim hundreds of pounds back in tax, thanks to a rule change by HMRC.

So what has happened?

Previously HMRC did not view smartphones (such as iPhones & Blackberrys) as mobile phones and so where employees were provided with them by their employers they were taxed as a 'benefit in kind', if available for non-work use.

But HMRC has now changed its mind and deems smartphones as business tools and so are no longer treated as a benefit in kind.

Claim back tax

According to the Daily Telegraph:

The new interpretation of the rules potentially allows employees to reclaim any tax they might have paid back to the tax year 2007/08.....

“Unlike ordinary mobile phones, which can be provided tax free to employees, smartphones have until now been treated as a taxable benefit. Tax can be charged on 20pc of the value of the device plus private usage costs. Smartphones can cost upwards of £400, so employees who have had a smartphone for several years could potentially claim back £200 or £300”.

Is there a catch?

No, but the rule change does not apply to tablet computers such as iPads.

Move quickly

If you benefit from this HMRC rule change then you may need to move swiftly as any claims relating to the tax year that ended on 5th April 2008 must be made by 5th April 2012.