A mobile phone contract through the business as an expense?

[Matthew J]

Hello

At the moment I have a personal 12 month contract with o2 for a mobile phone plan (just package).

I would like a new mobile phone handset contract and am thinking is it possible to get one through my ltd company as an expense?

I am hoping that I can switch my current personal contract to an upgraded contract, this time paying it through my company. Only thing is I am sole employee and director.

Has anyone ever done this? I have read online but am a little bit confused

 

[Scalloway]

HMRC expenses rules state that the company can provide staff with ONE mobile phone for business purposes, which is exempt from tax on the individual as a benefit-in-kind (BIK) and a legitimate allowable expense against corporation tax. Rules apply though.

More information here

https://www.ajnaccountants.co.uk/can-i-claim-a-phone-as-a-company-expense/

 

[Matthew J]

HMRC expenses rules state that the company can provide staff with ONE mobile phone for business purposes, which is exempt from tax on the individual as a benefit-in-kind (BIK) and a legitimate allowable expense against corporation tax. Rules apply though.

More information here

Thanks

Thing is Im not running PAYE for myself so cannot do it for an employee. Can I run it as an expense for the director?

 

[Mr D]

Thanks

Thing is Im not running PAYE for myself so cannot do it for an employee. Can I run it as an expense for the director?

The director is an employee.

 

[Scalloway]

Just put it through the company's accounts as an expense.

 

[estwig]

HMRC expenses rules state that the company can provide staff with ONE mobile phone for business purposes, which is exempt from tax on the individual as a benefit-in-kind (BIK) and a legitimate allowable expense against corporation tax. Rules apply though.

More information here

https://www.ajnaccountants.co.uk/can-i-claim-a-phone-as-a-company-expense/

That's a relief to know, been putting the O2 bills in the monthly shoe box to the bean counter for years.

 

[Matthew J]

Just put it through the company's accounts as an expense.

Thanks so much

it’s a new business (opened in August) so I might not even get a company contract, fingers crossed

 

[TheCyclingProgrammer]

HMRC expenses rules state that the company can provide staff with ONE mobile phone for business purposes

/pedant mode

The exemption is for one mobile phone for mixed business and/or personal use.

There's no limit on the number of phones that can be provided that are wholly and exclusively for business purposes although it would obviously require you to convince HMIT why a director/employee needed more than one handset/contract and that each additional was wholly and exclusively for business purposes.

OP - yes, if you want a phone that is for both business and personal use, you can get it through the company.

You have a number of options - the company could buy the handset for you to use with your existing personal SIM although only the handset cost would be tax deductible (you could also claim itemised business calls as an expense from YourCo with this option).

The company could also take out a business contract in its own name and provide you with both the handset and business SIM. If you can get a good deal this is generally the best option as it means a) the business pays for the entire cost of the handset and contract (so doesn't impact your own personal finances/cashflow), b) the entire expense is tax deductible for YourCo (if it buys the handset separately it may want to treat it as a capital expense) and c) if YourCo is VAT registered it will be able to reclaim the VAT on the handset and the contract costs.

I'd recommend taking a look at Virgin Business - I have unlimited voice and texts with 8GB of data for £15/month ex. VAT (I have two SIMs, one for me and one for my wife who is also a director) and I also get a £5/month discount on a business fibre broadband connection too (costs me £35 ex VAT). I buy my handsets outright and upgrade them every 2-3 years.

 

[MyAccountantOnline]

If you want to read up further HMRC's website here is good https://www.gov.uk/expenses-and-benefits-mobile-phones

 

[estwig]

If you want to read up further HMRC's website here is good https://www.gov.uk/expenses-and-benefits-mobile-phones

Alternatively, for just as much fun factor, you could put cocktail sticks in your eyes

 

[xjr13m]

Hello

At the moment I have a personal 12 month contract with o2 for a mobile phone plan (just package).

I would like a new mobile phone handset contract and am thinking is it possible to get one through my ltd company as an expense?

I am hoping that I can switch my current personal contract to an upgraded contract, this time paying it through my company. Only thing is I am sole employee and director.

Has anyone ever done this? I have read online but am a little bit confused

Just bear in mind that the contract has to be between your Ltd company and the phone company, it's not sufficient to have your company name on the bill of your personal contract. This means you will be on a business contract which like for like will be significantly more expensive than a personal contract

 

[TheCyclingProgrammer]

Just bear in mind that the contract has to be between your Ltd company and the phone company, it's not sufficient to have your company name on the bill of your personal contract. This means you will be on a business contract which like for like will be significantly more expensive than a personal contract

Whilst it’s true the contract needs to be in the company name it’s a common misconception that business contracts are significantly more expensive. There are lots of good business deals out there and you can reclaim the VAT if you’re registered.

I have a business account with Virgin, unlimited voice and text, 8GB of data for £15/month ex VAT and there are cheaper deals available.

 

[Matthew J]

Thanks guys

Gonna be switching over this week hopefully, to clarify, the business contract can include a contract which is also a handset upgrade? I’m guessing so just wanted to make sure

 

[TheCyclingProgrammer]

Thanks guys

Gonna be switching over this week hopefully, to clarify, the business contract can include a contract which is also a handset upgrade? I’m guessing so just wanted to make sure

The contract can include a handset.