Can I claim my mobile phone as a business expense?

Can I claim my mobile phone as a business expense?

Can I claim my mobile phone as a business expense?


Limited Companies

If you’re a Director of a limited company, it is possible that can claim the cost of your mobile phone bills as a business expense, providing only one mobile phone is provided to each Director/Employee.

HMRC allow the full costs of your mobile phone bills as a tax allowable expense, providing the mobile phone contract is held in the name of the limited company and the payments are made directly from the business bank account. This applies even if the phone is used for personal use as well as business use.

There are no personal tax liabilities, such as having to complete a P11D every year or pay personal tax on the benefit of the mobile phone.

If the company is VAT registered, you can also claim all the VAT.

Self Employed

If you’re trading as a sole trader or a partner in a business, you have two choices for charging mobile phone costs to your business.

You can have a mobile phone which is used for business purposes only, enabling you to claim all the costs relating to the business phone through your business (including claiming the VAT if you’re VAT registered). Or, if you already have a personal mobile phone that you wish to use for business as well, you can claim a proportion of the mobile phone costs.

To achieve this, you will need to calculate a reasonable split of your bills (and VAT) between business and personal usage. There’s no set way of performing this calculation, but it should be reasonable. One method is to take a sample of mobile phone bills and work out what percentage of the calls related to personal usage. That percentage is then subtracted from the full costs incurred. Providing, your method is reasonable and you review the percentage regularly, HMRC are unlikely to dispute your calculations.

VAT registered sole traders can claim back the VAT after deducting their personal use percentage.

If you have any questions about mobile phone expenses, please get in touch and we will be happy to help!