Claiming VAT on a mobile phone

[Alan @ Clyde Resources]

Hi there

I am a new Limited company and about to post my first VAT return.

To keep costs down when I started up I used my personal mobile phone for business. Therefore it is used for both personal / business calls.

Am I allowed to claim VAT back on all calls. Business Calls or No calls.

I am on a monthly contract and very rarely go over my usage.

I look forward to your comments.

 

[Fernhurst Solutions Ltd]

Hiya Alan

You can claim the VAT on your business calls only ... hope that helps.

PS - have you got an Accountant for your Year End Accounts, Corporation Tax, etc?

 

[David Griffiths]

Have to disagree with that, sorry.

If the phone is in the personal name of the director, I don't see how the company can reclaim the VAT - it won't have a valid VAT invoice.

If the company pays the phone bill, then the payments should be included in your pay for the year, and full Class 1 employer's and employee's National Insurance accounted for. It also goes on the P11D so that tax can be assessed separately.

 

[MyAccountantOnline]

The best thing to do would be to get the bills made out to the company ie in the company name and then you can claim all of the VAT and their is no benefit in kind.

 

[CassioAcc]

If the company is paying the business calls only then you can claim the appropriate element of VAT but HMRC may disallow it as the invoice is not in the company name.

I see you are on a fixed bill. As the business calls do not incur any additional cost you cannot claim anything.

 

[MyAccountantOnline]

If the company is paying the business calls only then you can claim the appropriate element of VAT but HMRC may disallow it as the invoice is not in the company name.

I see you are on a fixed bill. As the business calls do not incur any additional cost you cannot claim anything.

I disagree - as these bills are not made out to the VAT registered person ie the company then the company can not claim any VAT.

 

[David Griffiths]

I disagree - as these bills are not made out to the VAT registered person ie the company then the company can not claim any VAT.

Quite correct!

 

[Mattonella Tile Studio]

When I did the bookkeeping course they taught that for petty cash expenses where a member of staff was claiming something back, if a VAT receipt was submitted, to separate it out and claim the VAT in the VAT account.

 

[David Griffiths]

You might get away with that in the case of typical retail receipts, where there is no customer name, but it simply won't wash with a mobile phone bill which is clearly not in the company name.

 

[MyAccountantOnline]

When I did the bookkeeping course they taught that for petty cash expenses where a member of staff was claiming something back, if a VAT receipt was submitted, to separate it out and claim the VAT in the VAT account.

You might be thinking of subsistence and mileage which is different but in this case as it is a phone bill unless the bill is in the company name VAT shouldnt be recovered.

 

[KM-Tiger]

I'm sure the accountants are technically correct, but in practice I've reclaimed VAT on personal mobile bills for years, and never had that picked up on VAT inspections.

Not suggesting you follow suit, but might be worth a try until such time as you can change the invoice name to the company.

The risk would be having to repay it if challenged.

 

[David Griffiths]

I'm sure the accountants are technically correct, but in practice I've reclaimed VAT on personal mobile bills for years, and never had that picked up on VAT inspections.

Not suggesting you follow suit, but might be worth a try until such time as you can change the invoice name to the company.

The risk would be having to repay it if challenged.

Why not go the whole hog and claim for your home grocery bills? After all it might be worth a try, and the risk would be vaing to repay it if challenged.

 

[RAL]

Hi there

I am a new Limited company and about to post my first VAT return.

To keep costs down when I started up I used my personal mobile phone for business. Therefore it is used for both personal / business calls.

Am I allowed to claim VAT back on all calls. Business Calls or No calls.

I am on a monthly contract and very rarely go over my usage.

I look forward to your comments.

Let alone vat, I am afraid you can not claim the cost of the mobile calls either (You can not apportioned fixed contract as personal and business). HMRC says, if you go over the limit and use your mobile for the business usages and incurred any charges, then you can claim.

It is worrying to see that eagerness to recommend you to go to see an accountant and we as an accountant get it wrong.

 

[KM-Tiger]

Why not go the whole hog and claim for your home grocery bills?

Not much VAT on those! Though watch for those items with a * on the till receipt.

And there would be clear intent to defraud, which is not the case with a mobile used mainly for business, where the technicality is merely the name on the invoice, not the intended use.

BTW: Is there VAT on envelopes? I used a business one for a personal letter the other day.

 

[elaine@cheapaccounting]

Why not go the whole hog and claim for your home grocery bills? After all it might be worth a try, and the risk would be vaing to repay it if challenged.

oh dear - I best get off and go and put David's toys back in his pram

 

[David Griffiths]

Not much VAT on those! Though watch for those items with a * on the till receipt.

And there would be clear intent to defraud, which is not the case with a mobile used mainly for business, where the technicality is merely the name on the invoice, not the intended use.

BTW: Is there VAT on envelopes? I used a business one for a personal letter the other day.

The point that I'm making is that you are claiming for something that you actually know isn't claimable.

And of course the VAT on the grocery bills will depend on how many choccy biscuits you buy! To eat while you're working obviously.

 

[elaine@cheapaccounting]

Bets thing that the op can do is put the mobile in the name of the limited company then total cost can be claimed - business and personal

 

[KM-Tiger]

I would regard it as a grey area, and morally defensible, even if not compliant to the letter of the law.

To take another example:

I buy something on line for my business and use my personal credit card. The invoice I print out from the website has my name on it.

Reclaim the VAT?

 

[elaine@cheapaccounting]

I would regard it as a grey area, and morally defensible,

Do you think HMRC give a damn about morals? :|

 

[Gillie]

Ok well what about this one then ... I have had a contract with voda on a personal level forever and a day and last year I also took out a business contract with them for two phones, however, the way that voda works, is that they associate all of the phones under one main contract ie my original personal one and send one bill, which does have pages for each phone, but although the one for the new two are in my name, they do have voda business on them ... now voda won't change the phones into a business name unless I take out a completely new contract for two new phones .. phew!

So yes, I or him that does, claims vat back on the two business phones!

 

[elaine@cheapaccounting]

Gosh I have to read that a couple of times. I thought you had a contact for vodka

Just put the company name in the address field!

 

[Gillie]

Well him that knows Elaine says we claim the vat back on it, as I just place all the bills in front of him ... Its paid by the company etc, just happens to say my name, has company address on it though ... so I have absolutely no worries if the delightful vat man wants to question it!

 

[ArcherC]

Who is right?

Hiya Alan

You can claim the VAT on your business calls only ... hope that helps.

PS - have you got an Accountant for your Year End Accounts, Corporation Tax, etc?

If the company is paying the business calls only then you can claim the appropriate element of VAT but HMRC may disallow it as the invoice is not in the company name.

I see you are on a fixed bill. As the business calls do not incur any additional cost you cannot claim anything.

Let alone vat, I am afraid you can not claim the cost of the mobile calls either (You can not apportioned fixed contract as personal and business). HMRC says, if you go over the limit and use your mobile for the business usages and incurred any charges, then you can claim.

It is good discussion, however only two contributors, said that even cost is not allowable for the tax purpose. Shall I take it that the cost & vat is not allowable?

Thanks in advance

Clive

 

[RAL]

Shall I take it that the cost & vat is not allowable?

Thanks in advance

Clive

That is correct. It is here and here.