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27.11.2014

Mobile Phone Business Expenses Planning

Mobile phone business expenses are incurred by most people these days – who goes anywhere without theirs?
We’re very often faced with the question of what can and can’t be claimed.

 

Mobile Phone Business Expenses

The simple answer to each is NO…unless you get everything registered in the business name.

Business tariffs may be more expensive than personal tariffs but the benefits are vast:

  • The handsets can be claimed as a business expense;
  • Both call costs AND line rental can be claimed as a business expense;
  • If the business is VAT registered the VAT suffered is fully recoverable;
  • There’s no benefit in kind and associated business and personal costs…even for smart phones provided to employees;
  • Provision of multiple handsets to one person is a taxable benefit but still the related costs can be claimed as a business expenses;
  • If your spouse or partner also works in the business then they can have a tax free, fully business expensed phone too.

If you use a personal phone for business and the business reimburses you, you should be aware that:

  • The line rental isn’t a business expense;
  • Only the business calls element should be claimed;
  • VAT isn’t recoverable;

A costly benefit may arise if you claim more than you should, so don’t be caught out. Don’t let it put you off claiming the business expense, but why not simplify it all by transferring things into the business name?

Further details on what is and isn’t permitted are available from HMRC:

http://www.hmrc.gov.uk/manuals/eimanual/EIM21780.htm
http://www.hmrc.gov.uk/manuals/eimanual/EIM32940.htm

If you think you may be caught out by the rules or would like some planning and advice then please give us a call.
And if you know of any great business tariffs available out in the market place why not comment and share them with your fellow blog readers below.

CNM Advisory