iPhone as an expense??

[James Jackson]

Hi all,

Aabout 4 months back I took out a contract with Vodafone for an iPhone 4 with 600 mins, unlimited txts, and however much mb data.

It is a £35.00/month contract and I only got it to use for business purposes, the deal cost me about £120.00 upfront.

However, since then, I sold the iPhone via the business (all accounted for in the business records so it added to the businesses turnover) and now because I feel that it came in handy for business purposes I have bought the handset again from apple, to use with my ongoing contract.

My question is.... what out of the following is allowable as a business expense?

1. The £120.00 upfront fee
2. £35 each month
3. The money paid for the new iPhone
4. App's bought for business use e.g. Accounting App.

Obviously, I do download app's which are for personal use like free games, and I also buy music for personal use, however, I pay for these from a seperate iTunes account than what I would buy a business app from.

Any help would be appreciated.

James

 

[James Jackson]

I would like to add that I use this line as a business line, and I have a seperate personal number, which I dont give out willy nilly.

 

[paulears]

Business communications is a legitimate expense - with emails and the other features it makes sense. If the case is legit, then the amount is not a problem - sadly, we're all spending far too much on comms now.

I'm a sole trader and my mobile, land lines and internet are huge expenses, but vital ones. My old mum thinks £15 a quarter is a lot for her phone bill - my blackberry (horrible thing) cost me £80 this month - and when I upgraded to it, that was an expense too. My accountant never queried these costs whatsoever.

 

[JEREMY HAWKE]

It does not matter if your iphone is £15 a month or £1500 a month because you may spend your whole day on the phone to your lad in the Indonesion forests, who is loading indonesion furniture into containers for you to sell in the UK.Its still a business expense
I dont know what they might say if they found out you spend your whole day on You Tube though !

 

[MyAccountantOnline]

James - do you trade as a soletrader or via a limited company?

 

[Peasie]

James - do you trade as a soletrader or via a limited company?

Are Iphones/smartphones treated differently from other normal mobile phones? Is this where this question is leading?

 

[KernowQueen]

Are Iphones/smartphones treated differently from other normal mobile phones? Is this where this question is leading?

i think it's just a blackberry that has something you have to be aware of, it's come up on here before. edit: linky here with some info from HMRC, point 22.5

if you're a Limited Company, it's best to have in your business name.

i'm sure Nicola will be along soon to clarify

 

[Vintage06]

Hello. I have an iphone. I paid £99 upfront. Then 2 months later i started my business.

I switched my Direct Debit to my business account and claimed it as an expense. The months before you started etc I don't think you can claim back.

 

[xJustmyluckx]

My question is.... what out of the following is allowable as a business expense?

1. The £120.00 upfront fee
2. £35 each month
3. The money paid for the new iPhone
4. App's bought for business use e.g. Accounting App.

James

they are all allowable so long as you put the money from other phone sold back into business you can claim all of the above.

 

[paulears]

The only thing to remember is that a business expense is used to reduce the profit, meaning you pay less tax. It simply has to be reasonable - in HMRCs eyes, not the businesses. It's not some kind of right, or a bonus. Profitability is up to the business - so expenditure is up to you. If having the flashy phone and lots of apps is what you want, and the business can afford it - then that's your own choice. If you wasted thousands on a useless and ill conceived advertising campaign that brought nothing back in, it's still an expense. Exhibiting at a trade show costs a lot, and perhaps the benefit cannot be quantified - it's still fine.

If your mobile is for business, that is that - nobody cares if it's a free contact phone or something clever. If you put through multiple phones, perhaps bought for friends and family, and you are a sole trader with no employees, then that is likely to be queried by your accountant and/or HMRC if they ever noticed.

 

[James Jackson]

Also just to add to this, would the iPhone just be classed as a normal expense or a capital expense as the cost of the iPhone was high BUT when my contract runs out in just over a year I will be upgrading and this iPhone will be sold via the business.

Any help would be appreciated.

James

 

[James Jackson]

iPhone always