Get a cheap smart phone through work

A new salary sacrifice scheme can save employees up to 42% of the cost of a smartphone.

Run by the same people as Cyclescheme, the UK's biggest cycle-to-work scheme, the system works on the same principle.

Employers taking part in Phonescheme allow staff to choose from a range of phones, including the iPhone 6 and Samsung S7, which can be used either with their existing Sim card or with a new Sim-only or pay-as-you-go deal.

The employer then pays for the phone, recouping the cost from their workers' pre-tax pay over a 12-month period. As a result, staff are effectively saving the tax: between 22% and 42% depending on their tax band.

For example, a basic rate taxpayer choosing a £250 phone would save £80 in tax and National Insurance. After their monthly and end-of term payments, they'd get the phone for £195 - a 22% saving.

Meanwhile, a 40% taxpayer with a £750 phone would save £315 in tax and NI; after the payments, the phone would actually cost them just £510, a saving of 32%.

The phone actually belongs to the employer all this time. But at the end of the year, staff can buy the handset for a quarter of its original cost, extend the arrangement for another 12 months (paying 10% of the original cost) or return the phone.

The company also offers a childcare salary sacrifice scheme and one that supplies laptops and tablets, including iPads.

In all cases, employers do have to be signed up for the scheme - but there's advantages for them too, as they can save up to 13.8% on NI contributions for each phone.

Similar salary sacrifice schemes exist, for instance, for pension contributions and childcare, and cost the Treasury a huge amount.

In the run-up to last month's budget, there was speculation that chancellor George Osborne planned to limit such schemes, or axe them altogether; in the event, he didn't.

But there's been criticism that some schemes are simply a way of dodging tax, while buying luxury items - one scheme involves buying wine, for instance - and the government has admitted it is 'concerned'.