Q: We are also wanting to pay an annual phone allowance as we’re aware that some staff have had to use their personal phones for work use from time to time (not regularly).

My thoughts are that this would also need to be taxed as it’s more of a recognition payment, not a reimbursement. Is this thinking correct?

A: To make this type of payment a reimbursement it would need to be based on an actual expense the employee has incurred while working for their employer or reasonably assessed.  If neither have been applied then yes it becomes a taxable allowance.