UK - Around 7% of British American Tobacco's staff are using salary sacrifice to acquire mobile phones.
The cigarette manufacturing giant made the offer to its 1700 UK employees as part of a flexible benefits scheme introduced at the start of July.
Benefit-in-kind tax on mobile phones was scrapped four years ago but it is believed BAT’s scheme is the first to take advantage of its abolition.
Deducting the cost of the phones before employees receive their salary saves them money on both income tax and National Insurance contributions.
The deal was devised by benefits consultancy Entegria in conjunction with the tax specialist BDO Stoy Hayward.
Entegria’s head of flexible benefits practice, Clive Cripps, said BDO Stoy Hayward had sought legal opinion and went to the Inland Revenue offices in Somerset House to check the counsel’s interpretation was correct, to ensure the scheme was properly approved.
BAT employees can choose any phone from provider T-Mobile as well as a specified amount of airtime per month.
If the airtime balance runs out, employees can then purchase vouchers from T-Mobile.
Cripps is confident take-up will grow when employees’ current mobile phone agreements end. Other benefits available in the BAT flexible benefits scheme are critical illness, partner’s life assurance, holiday trading, health and dental insurance.
The most popular choices were for flexing of holidays (35% of employees) and dental insurance.
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