By: Claire Turner
The cost of your mobile phone and calls made can be a tax deductible expense for your limited company, the extent of what you can claim depends on the following two scenarios.
1. Company Contract
The cost of the mobile phone and all calls made from it can be fully tax deductible for your limited company and exempt from any personal tax charge to you providing that the contract and invoice for the phone purchase is in the company name. You also need to ensure that the monthly tariff is paid for directly out of the company bank account. To set this contract up, the network provider may request some company documents; all of which you will find in your online tool box.
2. Personal Contract
You can still claim the cost of business calls if you are unable to set a contract up in your company name or have an existing contract in your personal name which you are unable to change. To do this you will need to request itemised billing from your network provider to work out the value of calls made solely for business purposes. This option clearly isn’t as tax efficient as the first and involves slightly more admin but any tax deduction is worth considering.
Remember: The payment advice email sent when you raise an invoice using our online bookkeeping system only factors in your corporation tax liability and our accounting fee. You need to pay yourself the amount advised less the value of any company paid expenses (such as a company paid mobile phone).