Yes, you can claim the business share of your phone costs. How you do it depends on whether you are a sole trader or run a limited company.
If you are a sole trader:
- You can deduct the proportion of the handset, contract and call costs that is used for business.
- If the phone is also personal, split the cost on a reasonable basis, for example by checking itemised bills over a few months. Only the business part is allowable.
- A separate phone or SIM used only for the business is the simplest way to keep clean records.
If you run a limited company:
- A mobile phone contract in the company's name, for one phone per director or employee, is not a taxable benefit, even if you also use it privately.
- The company can deduct the cost and, if it is VAT registered, reclaim the VAT on it.
- If the contract is in your own name and the company reimburses you, the payment can be taxable on you unless it covers only business calls and you can evidence them. Moving the contract into the company's name avoids this.
- Buying the handset through the company is usually claimed as a capital allowance, not as an expense.
Keep the bills. Whichever structure you use, keep the contract and invoices so you can support the claim if HMRC asks.
Not sure which structure suits you? Try our sole trader vs limited company calculator.
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