If you’re a business owner, the chances are you use your mobile for work purposes and for personal calls and texts. So does this mean you can claim your monthly bills as a business expense?
What you can claim, and how, depends on whether you’re a sole trader or company director.
Can sole traders claim mobile phone bills as a business expense?
If you’re a sole trader, you can include your mobile phone bills as a business expense, but you have to discount a percentage for personal use. There’s no set-in-stone way to calculate this percentage. One common method is to take a couple of monthly bills and work out what percentage of the calls was personal. So long as your method is reasonable and you review the percentage every year, you should be fine. If you have any doubts, run it by an accountant.
VAT-registered sole traders can claim back the VAT after deducting their personal-use percentage.
Can company directors claim mobile phone bills as a business expense?
HMRC allow companies to provide each employee / director with a mobile phone which can be used for both business and personal use. As long as the bills are being paid out of your company bank account and the invoices are in the company name, you can claim the full amount on the bills as a business expense. If the company is VAT registered, you can also claim all the VAT.
It’s usually possible to transfer an existing personal contract into the company name, although some providers charge higher monthly fees for business contracts.
Still confused about mobile expenses? Get in touch.
