Budget 1999: Phones - Burden eased for mobile users

The Budget and Business

IT WAS Norman Lamont, the Tory Chancellor, who, in the 1991 Budget, imposed a tax on what he considered a growing menace: mobile phones.

Apparently annoyed by so-called yuppies shouting noisily into their mobiles, he gleefully announced he was going to tax them.

As a result, any individual provided with a mobile phone by an employer has been taxed.

Yesterday, the Chancellor announced he was scrapping the tax charge as of 6 April, removing "the unwelcome record-keeping and reporting burden on employers".

It is estimated this will benefit up to 350,000 individuals and will be worth pounds 80 to people on the higher tax code and pounds 46 to those on the standard rate.

The decision removes the difficulty faced by both employers and employees in trying to work out which calls were for business and which were for pleasure.

Under the old guidelines, employees could escape liability if they made no private use of the phone or re-imbursed the full cost of such calls.

According to details in yesterday's Budget documents: "That imposed further unwelcome compliance burdens on employees and employers."

The move is, perhaps, also a recognition that, since 1991, mobile phones have increasingly become less of a luxury for the wealthy and more of an important tool for work and business.

Neither companies nor individuals will have to do anything to fall in line with the new arrangements, which will cost the Government about pounds 25m a year. From May, Pay As You Earn codes will be altered to remove the tax charge.

It was also announced yesterday that telecommunication companies looking to buy licences to operate third- generation mobile phone services will receive tax relief.

It is expected that, by the end of the financial year, an auction will have been held for a series of licences that will operate for 20 years.

Tax relief will be spread over the life of the licence and will be legislated in 2000. The measure is designed to ensure consistent tax treatment for mobile communication services.

Start your day with The Independent, sign up for daily news emails
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Mortgage Advisor - OTE £95,000

£40000 - £95000 per annum: Recruitment Genius: This is an exciting opportunity...

SThree: Trainee Recruitment Consultant

competitive: SThree: Are you passionate about sales?Do you have a keen interes...

Recruitment Genius: Loan Adviser - OTE £30,000

£17000 - £30000 per annum: Recruitment Genius: This is an exciting opportunity...

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Day In a Page

Greece debt crisis: EU 'family' needs to forgive rather than punish an impoverished state

EU 'family' needs to forgive rather than punish an impoverished state

An outbreak of malaria in Greece four years ago helps us understand the crisis, says Robert Fisk
Gaza, a year on from Operation Protective Edge: The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas

Gaza, a year on from Operation Protective Edge

The traumatised kibbutz on Israel's front line, still recovering from last summer's war with Hamas
How to survive electrical storms: What are the chances of being hit by lightning?

Heavy weather

What are the chances of being hit by lightning?
World Bodypainting Festival 2015: Bizarre and brilliant photos celebrate 'the body as art'

World Bodypainting Festival 2015

Bizarre and brilliant photos celebrate 'the body as art'
alt-j: A private jet, a Mercury Prize and Latitude headliners

Don't call us nerds

Craig Mclean meets alt-j - the math-folk act who are flying high
How to find gold: The Californian badlands, digging out crevasses and sifting sludge

How to find gold

Steve Boggan finds himself in the Californian badlands, digging out crevasses and sifting sludge
Singing accents: From Herman's Hermits and David Bowie to Alesha Dixon

Not born in the USA

Lay off Alesha Dixon: songs sound better in US accents, even our national anthem
10 best balsamic vinegars

10 best balsamic vinegars

Drizzle it over salad, enjoy it with ciabatta, marinate vegetables, or use it to add depth to a sauce - this versatile staple is a cook's best friend
Wimbledon 2015: Brief glimpses of the old Venus but Williams sisters' epic wars belong to history

Brief glimpses of the old Venus but Williams sisters' epic wars belong to history

Serena dispatched her elder sister 6-4, 6-3 in eight minutes more than an hour
Greece says 'No': A night of huge celebrations in Athens as voters decisively back Tsipras and his anti-austerity stance in historic referendum

Greece referendum

Greeks say 'No' to austerity and plunge Europe into crisis
Ten years after the 7/7 terror attacks, is Britain an altered state?

7/7 bombings anniversary

Ten years after the terror attacks, is Britain an altered state?
Beautiful evening dresses are some of the loveliest Donatella has created

Versace haute couture review

Beautiful evening dresses are some of the loveliest Donatella has ever created
No hope and no jobs, so Gaza's young risk their lives, climb the fence and run for it

No hope and no jobs in Gaza

So the young risk their lives and run for it
Fashion apps: Retailers roll together shopping and social networking for mobile customers

Fashion apps

Retailers roll together shopping and social networking for mobile customers
The Greek referendum exposes a gaping hole at the heart of the European Union – its distinct lack of any genuine popular legitimacy

Gaping hole at the heart of the European Union

Treatment of Greece has shown up a lack of genuine legitimacy