Revealed: The true costs of BYOD

Revealed: The true costs of BYOD

Summary: You think letting your staff use their own smartphones and tablets is going to save you money? It might be time to think again.

TOPICS: Mobility, Hardware

BYOD won't save companies money. In fact, subsidising staff smartphones and tablets works out as a bad deal for both the business and the individual.

Companies going full BYOD and buying staff devices to use at work and home will generally face far greater costs than just supplying work devices, the Ovum BYOX: World Forum 2013 in London heard.

The BBC's head of IT strategy and policy, Paul Boyns, provided a rough breakdown of how much it could cost to give staff money to buy a personal and work device. "If we wanted to give them £500 the overall cost to us is about £700 by the time you take into account the efficiencies that we've lost, and they only get about £300 of it," he said.

Costs would be incurred in several areas: fresh tax liabilities, higher tariffs on consumer data and voice plans and subscription costs for mobile device management (MDM) software.

Consumer tariffs for voice and data for mobile devices can cost up to five times the price of corporate tariffs, according to Richard Absalom, senior analyst for consumer impact with Ovum — which means that letting staff claim expenses for charges on these personal tariffs "can easily negate any savings on the hardware".

Absalom said that swapping between personal and corporate SIMs was one possible but inelegant way around this problem, as was having more than one phone number registered to a single SIM card, as enabled by companies such as Movius.

He said staff and companies also faced additional tax liabilities from the full BYOD model. Under UK law, staff receiving money for, or being given, a device to be used outside the office would need to pay income tax on the value of the device or the amount of cash they are given.

"If they were on a 50 percent tax bracket then they would have to pay $500 if they were given a $1,000 device," Absalom said.

If the employee was given cash, both they and their company would also have to pay national insurance contributions; if the employee was given a device, just the company incurred additional national insurance charges. The staff member who was given the device would also become liable for declaring it as a benefit in kind to the tax authorities.

In addition, he said, the average MDM subscription cost between $3 and $7 a month. As employees often had more than one device, it often made sense to consider an MDM package that was licensed per user rather than per device,.

Support costs could go up due to internal helpdesk staff training to support a far wider range of devices, or down due to staff being more willing to resolve problems themselves, and with their peers, on a machine they perceived as their personal device.

It's still relatively rare for companies to reimburse staff for the cost of buying a shared personal and work device, with only 18.1 percent of staff surveyed by Ovum saying their company refunds the cost of such a machine. Where companies did stump up the funds the majority offered no more than $500.

In spite of a prediction by analyst house Gartner that half of companies may impose BYOD on staff by 2017, it seems most companies are focused on making it safer and easier for staff to use their existing personal devices at work rather than funding a BYOD scheme.

"We can't see subsidies working for us financially. If staff want to bring in their own device at the moment that's something we're helping to enable but we're not saying 'Here's some cash'," the BBC's Boyns said.

Topics: Mobility, Hardware


Nick Heath is chief reporter for TechRepublic UK. He writes about the technology that IT-decision makers need to know about, and the latest happenings in the European tech scene.

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  • Now really a bad deal

    Employee: "Can I bring my iPad to work?"
    Employer: "Sure, but our application doesn't run on iPad, so first you'll need to write an iPad app at home and bring it"
    Employee: "Here's that iPad app i built on my own time, can I bring my iPad now?"
    Employer: "Sure, but you'll need to configure to deployment servers for that app. Do it after hours please"
    Emploee: "Oh, those server are all set up. My lawn didn't get mowed and i missed my kid's soccer game, but I think its all done"
    Employer: "Great, just put up a WIKI explaining how to use the app, how to download it, and our phone number so people can call you after hours to take care of problems."
    Employee: "Wait, why do i need to support this?"
    Employer: "Who else will? If you're running our business on it, you'd better have support. If you need to off-shore your support, we could do a charge back to your for the time we spend supporting it. We'll just need to write up a service contract."
    Employee: "Hmm, what if i just get a Windows 8 tablet?"
    Employer: "Oh, yeah, that's no problem."
    A Gray
  • You forgot the part where the company patents it

    And then gives the employee a plaque while reaping millions from selling the rights to the patent trollls.
    terry flores
  • BYOD costs

    I agree with you if staff are allowed to claim the costs and there is support provided for personal devices across various platforms.

    You can always offer a BYOD service where data / telecom charges are borne by the staff and cost of replacing the device in case it is lost or stolen rests with the owner of the phone.

    The support can be limited to:

    1) One-off configuration of personal devices for staff to access corporate email and calendar and it can be achieved by providing detailed installation instructions to staff.

    2) Remote wipe incase of lost of stolen device

    Let me know what you think.

    Ashish Daga
  • Sorry I don't understand...this article makes no sense under UK Tax rules

    Section 319 ITEPA allows staff to salary sacrifice (pay from their gross pay) for a smartphone and tariff...income tax free. Under such an arrangement the employer saves Class 1a National Insurance.

    Pick the right supplier and the company can get better than business tariffs. It is also simple to incentivise the tariff and phone cost for the employee as the employer is recovering costs via the salary sacrifice not paying a supplier. All you do is charge the employee a fee for a part tariff payment, the rest of the contract being invoiced on a monthly basis.

    To be clear this doesn't "save" the employee anything. The employee takes a pay cut which mean they pay less NI. The employer saves because they lower the employees taxable pay under agreement.

    A similar treatment can be applied to tablets and computers, although it depends on asset treatment as to how employer savings accrue.

    All of this is freely available in HMRC guidance on PAYE and reporting.

    For the avoidance of doubt under s319 a 50% tax payer will pay 50% less tax on their mobile costs when compared to a cash equivalent sum. In some cases you could also add the potential benefits of a final salary pension scheme saving...

    No wonder the BBC is in continued difficulty....
    John Laity
  • Totally Misses the Point

    If a typical shop can provide free Wifi, so its customers can BYOD, then I don't see any reason why businesses can't do the same for staff, so they can do their jobs more efficiently. My company does this, and it's neither difficult nor expensive.

    Reads like a case of accountants over-reacting and over-complicating an incredibly simple issue with a whole load of busy-work.
    Peter Austin
  • UK tax implications of BYOD

    I am interested to know what other UK based companies have in place to reimburse staff for using their own smartphone or tablet for work purposes?

    I’m aware that any flat fee contribution to the employee will be seen as a benefit and therefore be subject to tax. Asking employees to submit an expense claim is also not particularly practical, as data and calls are typically part of a tariff bundle.