Claiming mobile phone expenses when self employed

Chris Andreou

self-employed person looking at mobile phone expenses

Can I claim my mobile phone as a company expense?

"Can I claim my smartphone as an expense?" is a simple, but a common question for first-time contractors.

That's because HMRC expense rules can be confusing, and while you want to be sure that you're running your business as tax-efficiently as possible, it's just as important to be in the good books of HMRC.  

We've put together a short guide so you can get a quick overview of the basics. If there are any areas you're unsure about, you may check in with our accountants at GoForma so you can be sure that you're claiming your limited company expenses correctly. 

Claiming Company Mobile Phone Expenses on Company Contract

According to HMRC, a company can provide staff with one mobile phone for business use.

As such, you're not required to report to HMRC, or make tax or National Insurance deductions if you're using one mobile phone or SIM card, and the phone contract is between your limited company and the phone supplier.

If you're using more than one mobile phone, one of the phones will be tax-free, but the remaining mobile phones will be considered a benefit in kind, and taxed accordingly. 

Both conditions need to apply for the exemption to be valid.

Keep in mind that the contract must be made in your company's name, and not in your name as the contractor. The exemption isn't valid if you're only just adding your company name and address to the monthly invoice.  

You can claim the following as expenses: 

  • Expenses relating to the purchase of the mobile phone: This includes the cost of the mobile phone, contract and call costs. 
  • Additional call costs: This can be charged if you obtain an itemised bill. If you've used up your inclusive minutes, and the additional call costs incurred are for both business and personal calls, the costs for your business calls can be claimed as an expense.
  • Pay as you go (PAYG) mobile: These are considered marginal costs, and can be claimed as an expense.
woman using her company phone

Claiming Mobile Phone Expenses on Personal Contract

If your mobile phone purchase and the contract is made in your name, you won't be able to claim the cost of the mobile phone or the monthly tariff.

This also applies if you've purchased a PAYG mobile.

The following will apply: 

  • The costs incurred for business calls made using your personal mobile can be claimed as an expense. This can be charged if you receive an itemised bill. You're also able to reclaim the VAT element of the business calls. 
  • If your personal phone bills are paid for by your company, you're required to pay a benefit in kind charge on the total bill. Your company will also pay Class 1 National Insurance Contributions on the total bill (after the costs incurred for business calls have been deducted). 

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Claiming mobile phone expenses when self employed

Chris Andreou

March 19, 2022

self-employed person looking at mobile phone expenses
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Tax

Can I claim my mobile phone as a company expense?

"Can I claim my smartphone as an expense?" is a simple, but a common question for first-time contractors.

That's because HMRC expense rules can be confusing, and while you want to be sure that you're running your business as tax-efficiently as possible, it's just as important to be in the good books of HMRC.  

We've put together a short guide so you can get a quick overview of the basics. If there are any areas you're unsure about, you may check in with our accountants at GoForma so you can be sure that you're claiming your limited company expenses correctly. 

"Can I claim my smartphone as an expense?" is a simple, but a common question for first-time contractors.

That's because HMRC's expenses rules can be confusing, and while you want to be sure that you're running your business as tax-efficiently as possible, it's just as important to be in the good books of HMRC.

We've put together a short guide so you can get a quick overview of the basics. If there are any areas you're unsure about, you may check in with our accountants at Forma so you can be sure that you're claiming your limited company expenses correctly.

Claiming Company Mobile Phone Expenses on Company Contract

According to HMRC, a company can provide staff with one mobile phone for business use.

As such, you're not required to report to HMRC, or make tax or National Insurance deductions if you're using one mobile phone or SIM card, and the phone contract is between your limited company and the phone supplier.

If you're using more than one mobile phone, one of the phones will be tax-free, but the remaining mobile phones will be considered a benefit in kind, and taxed accordingly. 

Both conditions need to apply for the exemption to be valid.

Keep in mind that the contract must be made in your company's name, and not in your name as the contractor. The exemption isn't valid if you're only just adding your company name and address to the monthly invoice.  

You can claim the following as expenses: 

  • Expenses relating to the purchase of the mobile phone: This includes the cost of the mobile phone, contract and call costs. 
  • Additional call costs: This can be charged if you obtain an itemised bill. If you've used up your inclusive minutes, and the additional call costs incurred are for both business and personal calls, the costs for your business calls can be claimed as an expense.
  • Pay as you go (PAYG) mobile: These are considered marginal costs, and can be claimed as an expense.
woman using her company phone

Limited Company Expenses Guide

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Limited Company Expenses Guide

Claiming Mobile Phone Expenses on Personal Contract

If your mobile phone purchase and the contract is made in your name, you won't be able to claim the cost of the mobile phone or the monthly tariff.

This also applies if you've purchased a PAYG mobile.

The following will apply: 

  • The costs incurred for business calls made using your personal mobile can be claimed as an expense. This can be charged if you receive an itemised bill. You're also able to reclaim the VAT element of the business calls. 
  • If your personal phone bills are paid for by your company, you're required to pay a benefit in kind charge on the total bill. Your company will also pay Class 1 National Insurance Contributions on the total bill (after the costs incurred for business calls have been deducted). 

Get In Touch

To book a call with one of our certified accountants, you can visit our calendar to book a FREE consultation here.

Limited Company Expenses Guide

What's Inside:

  • Allowable business expenses
  • Employee expenses
  • Travel expenses
  • Office & equipment expenses
  • Professional services expenses
  • General expenses
Thank you! Your submission has been received!
Oops! Something went wrong while submitting the form.
Limited Company Expenses Guide

What's Inside:

  • Allowable business expenses
  • Employee expenses
  • Travel expenses
  • Office & equipment expenses
  • Professional services expenses
  • General expenses

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Limited Company Expenses Guide