Question:

“I have recently started contracting through my own limited company and I use my mobile phone for both personal and business purposes. How much of the cost can I claim in my Limited company?”

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Answer:

The short answer is you can claim the full cost of your mobile phone through your limited company on the proviso that the phone is in the name of the Limited Company.

For most people this means getting in touch with your mobile phone provider and asking them to transfer your current contract into the name of your limited company. From this point bills raised should be in the name of your company and the bills paid from the company bank account.

This can, in some cases, lead to an increase in the contract charge to a business tariff so be sure to talk to your mobile phone provider about this.

This has not always been the case, in 2012 HMRC brought out a new ruling allowing a limited company to provide its staff / directors with one smartphone each. The phone can be used for both business and personal use without there being a tax benefit.

Even if there is a small increase in cost for the tariff being a business one it is still a tax efficient business expense as your company will get full corporation tax relief for the cost – if you were a Sole Trader you would only be able to claim the % of your phone costs that relate to business.

If you do not have the mobile phone contract in the company’s name you should only claim highlighted specific call charges that have been incurred on your personal mobile phone contract for business use.

If you have found this article useful then you might want to download our free guide on how to save tax:

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