UK Gifting mobile phones to employees ?

[Jay2]

could anybody help please
every 2 years we take out a mobile phone contract package for employees , these costs get Expensed each month (against telecoms) nothing hits the asset register, the package is similar to a personal one in that the handset comes "free" as part of the package.
When the deal ends we shop around to find a new deal (and new handsets come with it again).
In the past we would sell the phones to employees (at market rate) for anyone who wanted one, any left would simply be left in work to rot basically.
We have a 2 year contract ending this month and the MD has asked if employees can simply keep their phones when it ends, at no cost - to gift them to employees.

Can we do this ? or do i need to charge employees who want their phones , or is it something i must ask the auditors about (although could open can of worms?)

The MD needs an answer from me

thank you for your help!
jay

 

[Fidget]

Nothing stopping you from doing it, but it becomes an employee benefit so there's a potential tax implication on the organisation for it (or the individual if the organisation doesn't want to pick up the tax bill).

 

[Jay2]

What is the mechanism , do we just charge the employee the tax element on a company invoice , slightly unsure how we would do it

 

[Fidget]

A P11D to HMRC for each employee will show the value of the benefit and HMRC will do the tax collecting if the company isn't picking up the tab. Best speak directly with HMRC about the logistics of it.

We use PAYE settlement agreements (PSA) for employee benefits because the organisation picks up the employee & employer tax bill for them, so we don't do P11d submissions.

 

[Jay2]

In the past we would raise an invoice to the employee so they had to pay market value for the used phone if they wanted to keep it . I take it that is still ok to do