Mobile Handset Purchase

[Bomster1]

Good afternoon all!

I've read the following article, but still want to clear something up in relation to mobile phone purchases: https://www.contractoruk.com/limited...y_expense.html

I purchased a Pixel 2 XL handset (£629) back in May, and I want to check if I can put this through as a business expense.

- I use the handset for both personal and business use.
- I purchased the handset using my own personal bank card, as at the time I had not yet earned any money into my Ltd account. The above article states this means I cannot claim as an expense, but as I said, I was not in a position financially with my business to be able to make the purchase, as I had only just setup my Ltd, and hadn't started receiving any money yet.

Can I put this in as an expense and claim the money back? My accountant just said: "Normally to expense the phone through your limited company, it would have to be wholly and exclusively for business use, and shouldn’t really hold a personal element to it." - but I feel like this is incorrect?

Your help is much appreciated!

Bom

[TheCyclingProgrammer]

Your accountant is wrong. A single phone can be provided to a director or employee for mixed personal and business use.

I wouldn’t worry about having had to pay for it personally and reclaiming it although you may not be able to reclaim the VAT unless you have an invoice in the company name. You can record it as an asset in your books or treat it as a profit and loss expense. You’ve effectively loaned YourCo the money to make a purchase.

Important to note that in order to claim the costs of any contract the contract should be in the company name otherwise you can simply expense any itemised business call costs.

[man]

My accountant just said: "Normally to expense the phone through your limited company, it would have to be wholly and exclusively for business use, and shouldn’t really hold a personal element to it." - but I feel like this is incorrect?

I don't know about the rest of it but yes, this bit is incorrect. Phones and laptops are an exception to the usual 'wholly and exclusively for business use' rule of thumb:

https://www.gov.uk/expenses-and-bene...s/whats-exempt

Note that with laptops at least, an 'insignificant' amount of personal use is allowed. I'm not sure on the level of personal use allowed with regards to phones, but I know that a personal element is certainly allowed. Hope that helps.

[TheCyclingProgrammer]

There isn’t any specific exemption for laptops. The “insignificant personal use” rule can be applied to any company asset made available for the use of an employee or director (so would also cover other IT equipment, office furniture etc).

There is a specific exemption for a single mobile phone though.

[man]

There isn’t any specific exemption for laptops.

Are you sure about that?:
https://www.gov.uk/expenses-benefits...e/whats-exempt

[TheCyclingProgrammer]

Are you sure about that?:
https://www.gov.uk/expenses-benefits...e/whats-exempt

Yes. Try looking at the technical detail.

https://www.gov.uk/hmrc-internal-man...anual/eim21613

[l35kee]

That's a pretty simple thing for your accountant to get wrong?

[craigy1874]

Bit worrying that an accountant got this wrong, this is very basic stuff.

[JB3000]

Bit worrying that an accountant got this wrong, this is very basic stuff.

Probably a trainee accountant that would have thought they were correct and providing sensible advice (but obviously not)

[man]

Yes. Try looking at the technical detail.

https://www.gov.uk/hmrc-internal-man...anual/eim21613

Fair enough, it seems I misread your post entirely. The technical detail you've linked to appears to state that if it's needed for business purposes then supplies of that nature are permitted to be claimed irrespective of the personal use element. So indeed, not just laptops and phones!