The withdrawal of the Home Computing Initiative in the March 2006 budget announcement shook the employee benefits world. The demise of HCI has seen organisations looking for a replacement for this popular benefit, particularly where they have a mature and well established benefits culture. Mobile phone provider Flexphone outlines the scheme.
Mobile Salary Saver, which is made possible by the Government’s tax exemption on loaned mobile phones for personal use, allows employers to loan handsets to their employees for personal use as a tax-free benefit.
Now that the scheme has had explicit approval from HMRC, every UK employee has an opportunity to get a mobile phone package through their employer free of tax and National Insurance. The clarification on the number of handsets allowed on the scheme from a maximum of five handsets to one per employee was a little unexpected, but in reality the number of employees that took additional handsets was low.
Employers can offer their employees a ubiquitous and cost-effective employee benefit which is financially rewarding for both parties. Given that everyone who owns a private mobile currently does so without the benefit of tax relief, Mobile Salary Saver is the practical way for employers to implement and offer the benefit to its staff.
Based on Vodafone UK’s consumer prices, (those available in Vodafone retail stores) employees can purchase the latest phones on both pay monthly and pay as you talk price plans, making savings of up to 41 per cent. By agreeing to a reduction in annual gross salary, National Insurance contributions for the employer will fall by 12.8 per cent.
With an estimated 50 million mobile phones in use in the UK, most employees should benefit from joining the scheme.
Mobile Salary Saver is, therefore, well placed to occupy the HCI vacuum as employers and staff already understand the tax benefits; and also are likely to be technology savvy and keen to take advantage of the ever more sophisticated capabilities of modern mobile phones such as mobile TV, MP3 players and high resolution digital cameras, now that the HCI has been withdrawn.
Russell Horton, Managing Director of Flexphone Ltd, said, “Mobile Salary Saver is a great benefit for both employer and employee. This is a unique and valuable employee benefit, with tangible savings.”
About Flexphone Ltd
Vodafone UK’s chosen partner, Flexphone Ltd, is a subsidiary of mobile service provider, Isis Telecommunications Management Ltd. This company has won numerous customer service awards and most recently Best Customer Service at the Sage Business Awards 2005 in partnership with The Daily Telegraph.
For more information, go to www.flexphone.co.uk or call 0845 838 7777.
Contacts:
Elaine Maguire
Elaine Maguire
