24th September 2020
If you have a mobile and use the internet for business, then this guide is for you. We’ll explain what you can claim and how to do it to maximise the tax benefits through your limited company.
There are two general ways you can claim telephone costs through your limited company. You can either use your mobile and claim the business calls only or let your company purchase a mobile phone and take out a contract in the company name. So which one is the better option?
Using your personal mobile
As mentioned above in this case, you can only claim the cost of the business calls and let’s be honest it is fairly impossible now that most of us have inclusive minutes included in our monthly bill. Even if you could list out the business calls, the corporation tax saving on them would be minimal.
If you use your mobile primarily for business, then it makes sense for your company to provide you with a mobile phone.
In this case, the company pays the entire cost of the handset and takes out a mobile contract in the company name. The corporation tax savings will be 19% of the value of the handset and the monthly bill. If the company is VAT registered, it will be able to claim the VAT back on these as well.
When working remotely from home, you might use your landline to make calls and the process of claiming the cost is similar to mobiles; you can claim the business calls. Should you find yourself using the landline for business only then it is probably best to take out a business package.
Whether it is a home or a mobile service and often bundled with the phone minutes but the rules are the same again. If you use it for business, then take out a business package and take advantage of the savings on corporation tax.
Things worth noting
Taking out a business contract in any of the above services will probably result in a slightly higher bill, but the savings will hopefully outweigh the costs. After all, buying a £900 mobile phone will knock £171 off the Corporation Tax bill.
The handset will be the property of the company, so proceeds from selling it will have to through the company’s books.
It is worth noting that once the company owns a mobile, then repairs or insurance costs will also be company expenses.
If you are one of our clients, please do not hesitate to contact your accounts assistant or manager, either will be happy to advise you if you have any questions.
If you are not a client and would like to know more about MyAccountant and what we can do for you, e-mail us at firstname.lastname@example.org or call 0800 917 9100 to see what we can do for you.