Limited Company and business phone

[mskemails]

Hi

I have recently setup my limited company for my IT job and planning to have mobile phone on the company name and planning to pay from company's bank account

also came to know that I can buy iPhone/HTC models now, Is that correct ?

my question is, can I use it for my personal use within the allowance , I am looking for 600 minutes + unlimited landline calls + 500 MB for 35£ to 45£ range, I am mainly going to use for personal use only (80%)

Is that allowed ? Is that advisable? Can we get any benefit ? Is there any restriction that I should not be used to contact my family members.

MSK

[northernladuk]

This gets asked weekly. Try a searching for more advice but...

I have recently setup my limited company for my IT job and planning to have mobile phone on the company name and planning to pay from company's bank account

Question to ask yourself is are you using it for business? It is not correct to do this if you don't intend to.

also came to know that I can buy iPhone/HTC models now, Is that correct ?

Yes you can

my question is, can I use it for my personal use within the allowance , I am looking for 600 minutes + unlimited landline calls + 500 MB for 35£ to 45£ range, I am mainly going to use for personal use only (80%)

Is that allowed ? Is that advisable? Can we get any benefit ? Is there any restriction that I should not be used to contact my family members.

This is a funny one. By your own admission you shouldn't have it through the company. You should have a personal phone and claim the costs back so you need to re-think your position on this. The fact that the packages are all in nowadays who knows what is for business what isn't. The calls are free.

What I would do is ask yourself if you are going to make this number available to the client and are you going call/take calls on it whilst executing your contract. If not I would argue this is not a works phone at all and take it as a personal one.

Business expenses are fine but they have to be for the business. You don't have an LTD just to rip it off.

Golden rule of expenses are wholly and exclusively generally but with home equipment and phones some personal use is allowed. 80% is NOT some personal use.

If the contract is in LTD name and DD comes from LTD bank you are allowed some personal use. Just put it through company. If you are worried about personal/work use make sure you put that number on your contact details when on client site..

If you are not going to take calls from the client on it and only use it for taking calls from agents and finding work I would argue it isn't business use and put it all in your name as normal.

[Clare@InTouch]

If the phone is in your personal name then you can only claim any identifiable business calls. If you've got an inclusive package then these are likely part of your allowable minutes therefore there's no additional cost and no claim.

If the phone is in the business name, and the contract is in the business name, then you can claim the whole bill regardless of how much is business and how much is personal. It's one of the few areas where HMRC are generous about allowing personal use.

[TheFaQQer]

Golden rule of expenses are wholly and exclusively generally but with home equipment and phones some personal use is allowed. 80% is NOT some personal use.

If the contract is in LTD name and DD comes from LTD bank you are allowed some personal use. Just put it through company. If you are worried about personal/work use make sure you put that number on your contact details when on client site..

If you are not going to take calls from the client on it and only use it for taking calls from agents and finding work I would argue it isn't business use and put it all in your name as normal.

The rules for a mobile phone aren't the same as other expenses - as long as there is some business use, then anything personal doesn't mater.

I disagree with pretty much everything I've quoted. Your suggestion that having a mobile phone, which you use to find work for your business, and treat this as a personal thing rather than a business one seems daft.

Clients and agencies don't have my mobile phone number - they have a YAC number which redirects to the mobile. Does that mean that it's not a business expense? Of course not.

[Wanderer]

A reference for this is here: Telephones - mobile

The key things here (as pointed out by Clare) are:

• The contract must be in the company name
• The phone can be used for private and/or business calls
• There are no tax implications

[Goatfell]

When is a nmobile phone not a phone?

I've had a look around various sources and can't seem to find a definition of a phone, as it has quite an effect on how it's treated:

"Please note that the rules in this guide don’t apply to a device such as an iPhone or BlackBerry – the range of functions these devices offer means that HM Revenue & Customs (HMRC) doesn’t consider them to be primarily mobile phones."

As most phones of the last 3-4 years enable internet browsing and run apps of some sort, what distinguishes a "mobile phone" from a "mobile device" in Hectors eyes. I'm thinking that Lumias, Glaxies and HTCs could fall foul, or not?

Any ideas?

[SueEllen]

I've had a look around various sources and can't seem to find a definition of a phone, as it has quite an effect on how it's treated:

"Please note that the rules in this guide don’t apply to a device such as an iPhone or BlackBerry – the range of functions these devices offer means that HM Revenue & Customs (HMRC) doesn’t consider them to be primarily mobile phones."

As most phones of the last 3-4 years enable internet browsing and run apps of some sort, what distinguishes a "mobile phone" from a "mobile device" in Hectors eyes. I'm thinking that Lumias, Glaxies and HTCs could fall foul, or not?

Any ideas?

If you had bothered to dig deeper into HMRC guides you would have found your answer.

In short iPhones, Android, Blackberry and Windows smartphones are all considered by HMRC to be computers.

If this computer is primarily for business use then you can claim it and it's charges.

Just like you can claim mobile business broadband and business broadband if you primarily use it for business. (If you claim business broadband costs at home and you let your children use it then it's not a business expense as it's not "wholly and exclusively" for your business needs. )

BTW I don't know what you specialise in but lots of people use their phones for:
1. Business email
2. Search for information related to business
3. Read articles related to their business
4. Update their social media profile(s) which due to not being an employee you can argue is a professional one
5. Search for roles
6. Record expenses

[northernladuk]

The rules for a mobile phone aren't the same as other expenses - as long as there is some business use, then anything personal doesn't mater.

I disagree with pretty much everything I've quoted. Your suggestion that having a mobile phone, which you use to find work for your business, and treat this as a personal thing rather than a business one seems daft.

Clients and agencies don't have my mobile phone number - they have a YAC number which redirects to the mobile. Does that mean that it's not a business expense? Of course not.

Indeed but I am working on the basis this is 80% personal use. A post from Craig at InTouch and from a number of other accoutnants in the past have mentioned the personal use not being significant. 80% is significant.

One of the links below as an example

http://forums.contractoruk.com/accou...ml#post1258897

[SueEllen]

Indeed but I am working on the basis this is 80% personal use. A post from Craig at InTouch and from a number of other accoutnants in the past have mentioned the personal use not being significant. 80% is significant.

One of the links below as an example

http://forums.contractoruk.com/accou...ml#post1258897

As most people under or over estimate their call usage I would be surprised if a new contractor would know exactly how s/he would be using their business phone in their business.

Also clients work differently and you could be working remotely or on a client's customer's site where you need to use your mobile a lot.

Also even if you are on the client's site you may not be given a desk phone or it may be blocked from certain numbers and if a few of the people you are working with are off-site with only mobile number then you are going to have to use your mobile.

[Goatfell]

In short iPhones, Android, Blackberry and Windows smartphones are all considered by HMRC to be computers.

Thanks for your reply SueEllen, my question related to what defines a smartphone however.

I am aware that a smartphone would be treated under the same rules as a computer asset and the restrictions and rules inherent in its provision and the mechanism in which the BIK is worked out, but why make life more complicated, or expensive, than necessary. The link that TheFaqqer provided is a case in point, it refers to how mobile phones are treated by HMRC. After looking at what phones are available now, I can't see any that are simply mobile phones and in light of the OPs question and the subsequent replies the definition is cogent to the discussion.

I am looking to replace a Sony K800 which would probably not be called a smartphone by most people, but it has a camera, contacts and calender organiser, it can take notes, play music, receive radio broadcasts, I can send and receive emails on it, browse web pages etc, so it does have capabilities beyound the primary purpose of a mobile phone [Note (a) below]. The link in the second para [Note (b) below merely sends you back to the rules for PDAs/Blackberrys without really saying where the line that demarcates between phones and PDAs is.

One interesting snippet I have found was this opinion:
HMRC's interpretation of what is or is not a mobile phone or a computer has not yet been tested in court. Employers that decide not to report a smartphone (e.g. an Apple iPhone or RIM Blackberry) because they believe it qualifies under the mobile phone exemption must be prepared to justify that decision. A possible advantage lies in the fact that "computer" is not defined in legislation and is no longer singled out by a specific exemption, but "mobile telephone" is defined. There is nothing in the mobile phone exemption that states that it is no longer a mobile phone if it also has computer facilities.

...but I've never seen myself as a guinea pig



From EIM21779:
(a) For 2006/07 onwards the definition of a mobile phone is extended to include apparatus designed or adapted for the primary purpose of transmitting and receiving spoken messages and used in connection with a public electronic communications service. i.e. handsfree/Bluetooth operation AIUI.

(b) The definition does not cover apparatus that is designed or adapted for a primary purpose other than transmitting or receiving spoken messages, even if that apparatus is also capable of being used in this way. Examples of apparatus that does not fall within the definition of a mobile phone include satellite navigation devices and personal digital assistants. (See EIM21701 for more on the latter).