Old mobile phones and captial expentiture

[northernladuk]

Guessing he used him because he was his BIL, not because he was a contractor accountant.

Never, ever, mix business and family unless you absolutely have to.

Would love to be there when he sacks him for being tulip lol!! Someone won't be getting their oats for awhile!

[kal]

Not being able to expense a mobile phone unless its in the company name (and the money needs to come directly out of the company account I might add) is expenses 101, god only know what a mess your accounts are in, get a professional contractor accountant in and pay him whatever its takes to sort this mess out.

[TheFaQQer]

Not being able to expense a mobile phone unless its in the company name (and the money needs to come directly out of the company account I might add) is expenses 101, god only know what a mess your accounts are in, get a professional contractor accountant in and pay her whatever its takes to sort this mess out.

FTFY

[TheCyclingProgrammer]

You could also reference this HMRC page:

If you haven't been doing that, then this opens up a whole other can of worms.

Not relevant here, but something I recently noticed is that it is possible in limited circumstances for an employer to pay for an employee's mobile when the contract is in the employee's own name *if* a) the employer pays the supplier directly and b) the phone/contract was purchased business purposes AND only used for business calls. (see the exemption under the "Employee's own mobile - you pay the supplier directly" section on the same page).

Of course, this is quite limiting and you'd probably have to demonstrate that its not used for personal calls. Seems a silly way of doing things when YourCo can provide you with one phone to use as you like as long as you get it in the company name.

OP: you shouldn't have been apportioning your contract rental as others have been pointing out to you although if you were advised to do so by your accountant I guess its not entirely your fault. I wouldn't worry about it too much...its unlikely to be an issue unless you have a compliance check and even then I think you'd have a reasonable defence against any penalties. But you'd still be liable for underpaid tax and NIC.

Regarding selling the phone, if the contract was in your name then the phone belongs to you. You are free to do what you like with it - sell it, give it away.

If the phone is purchased by the company then it belongs to the company and how you account for the sale depends on whether the phone was capitalised or not.

[EvolutionSPM]

Thanks all for your responses. I am not 100% happy with the accountants service at the moment, hence the questions on here. Just finishing up a contract at the moment, it is nearly my end of year accounts and will look at choices then, I understand the rules on mobile phones, i.e.. personal contact = claim business calls only, business contract = claim monthly charge/calls. Due to mitigating circumstances at the time we had to go down this route and we have approval off the HMRC for this. The contract is now in the name of the company.

Regarding the original question on do I need to buy the phone off the company? Is this correct? I am getting conflicting advice on this.

Stuart

[EvolutionSPM]

If the phone is purchased by the company then it belongs to the company and how you account for the sale depends on whether the phone was capitalised or not.

Thanks, will look further into this.

Stuart

[TheFaQQer]

Due to mitigating circumstances at the time we had to go down this route and we have approval off the HMRC for this.

You got HMRC to agree that you could deviate from their expenses manual just because you were a new company?

Is the phone contract with Vodafone?

[TheCyclingProgrammer]

Regarding the original question on do I need to buy the phone off the company? Is this correct? I am getting conflicting advice on this.

Who bought the phone? It sounds like you bought it (or you paid for it over time as part of your monthly contract). If the contract was in your name, then I'd say the phone belongs to you.

[EvolutionSPM]

You got HMRC to agree that you could deviate from their expenses manual just because you were a new company?

Is the phone contract with Vodafone?

The phone is with o2.
-Can't be in companies name, as new company with no credit history.
-Registered in my name (100% shareholder/director) and at the companies registered address.
-Will move to companies name as earliest opportunity - already done.
-My company stationery, CV, linkedin, etc quotes the work number
-I have a basic pay as you go mobile and keeping top-up receipts as evidence. I switch off the work one at weekends/holidays.
-The company needed a phone number and for various reasons can't use the home phone. Also not good when traveling for interviews/client site etc.
-I needed to access emails/linkedin/internet/cv updates whilst on the move.
-To cover my access of personal internet (bbc news, facebook,etc) on the move, I reimburse the company 10% per month.

HMRC have approved this.

Stuart

[DaveB]

Regarding the original question on do I need to buy the phone off the company? Is this correct? I am getting conflicting advice on this.

Stuart

You bought the phone in your name, with your own money. In the absence of a company policy that says payment of phone expenses has the effect of transferring a personal phone to the business I would say it is still yours.

If it is the companies you need to determine the length of time over which company assets are depreciated (you have to declare this as part of your accounts, as company director you are in apposition to set policy on this).
Many companies operate a policy whereby depreciated kit is offered to employees for a nominal amount or free. If you have had the phone for two years and the companies depreciation policy writes it off after two years then the net value to the company is Zero and you can legitimately give it to yourself at zero cost provided the disposal is properly recorded.