Mobile Phone for Personal Use but Claimed as Expense...

**Lewis** · 25 June 2008, 09:49

Originally posted by shippwreck View Post

Hi,

I have filled in my P11D form with mobile usage etc from a phone that is in my personal name. Now my accountant has told me that I must only charge those calls that are business etc. Which is only 10% ish of the bill... and probably most of those calls are within the free minutes anyway meaning probably £0

They advised me to change my phone to the company name, which I have done now so there wont be a problem with this in the future, but obviously I have one now as the phone has cost about £600 ish over the past year and I have claimed that all as expenses each month. I thought I was fine based on this page from HMRC:

http://www.hmrc.gov.uk/manuals/eimanual/EIM21779.htm

But I wanted to check how you guys interpreted this page as its very possible I got it wrong. The company is registered as a limited company with me as Director and SWMBO as Company Secretary.

Thanks for any help in advance!

Phone must be in company name to claim all calls. Otherwise only business calls claimable. Your accountants are correct.

**shippwreck** · 25 June 2008, 09:53

So then what does the first paragraph from the link I posted actually mean?

In most circumstances the provision of one mobile 'phone to a director or employee for private use is exempt from charge. The exemption covers the phone itself, any line rental and the cost of private calls paid for by the employer on that phone.

What does being exempt from charge mean especially as the line rental and cost of private calls has been paid by "the employer" ie my company?

Thanks for your help

**malvolio** · 25 June 2008, 09:54

WHS. I assume you're not charging your mortgage and dog food bills to the company as well? Get it very clear in your head, Yourco and You are two entirely separate legal entities with their own assets, income and expenditure. Don't ever mix them up.

**DaveB** · 25 June 2008, 10:00

Originally posted by shippwreck View Post

So then what does the first paragraph from the link I posted actually mean?

What does being exempt from charge mean especially as the line rental and cost of private calls has been paid by "the employer" ie my company?

Thanks for your help

It means that if YourCo Ltd buys a phone and gives it to you, you as the director or employee are allowed to use it for private use without having to keep track or private/business call details. The phone and any associated contract has to be in your companies name, not your personal name. You do not claim it on expenses since the company pays the bill directly. The phone is not yours, it is a company asset that you are permitted to use for private use.

**shippwreck** · 25 June 2008, 10:04

LOL, well of course i'd love to charge the mortgage, but don't

There was a pragraph here... but Dave B answered it so i removed it

hmmm, so does that mean that I now have to "give back" to my company the extra in expenses I claimed over the year for the phone, or will Mr Taxman sort that out by taxing it accordingly for me... obviously the expenses have been paid now so I can't change that... just wondering the best way to correct the error?

Balls!

Thanks for your help guys!

**Integrity** · 25 June 2008, 10:17

Originally posted by shippwreck View Post

LOL, well of course i'd love to charge the mortgage, but don't

There was a pragraph here... but Dave B answered it so i removed it

hmmm, so does that mean that I now have to "give back" to my company the extra in expenses I claimed over the year for the phone, or will Mr Taxman sort that out by taxing it accordingly for me... obviously the expenses have been paid now so I can't change that... just wondering the best way to correct the error?

Balls!

Thanks for your help guys!

It has happened, so the only way forward is to pay back the money you now owe your company. If you list the error on your next expenses document, then your expenses will show a negative amount (maybe), and the paper trail will be accurate.

Moving forward, consider cancelling the contract and taking out a new contract in the company name.

**shippwreck** · 25 June 2008, 10:34

Right, so i'll be paying the expenses back...

As for the contract... I simply rang Orange and asked for the contract to be transferred to the company name... they credit checked the company, waived a £150 charge and said it'll be in the company name from the next bill onwards. The call plan, cost and length of contract all continues exactly the same.

The problem with setting up a contract from new on a company tariff is that you get a rubbish call plan... I think in future if I change from Orange i'll always set it up as a personal phone and a month in change the contract over to the company... that way you get the best of both worlds...

**crgritchie** · 20 May 2010, 10:39

Originally posted by shippwreck View Post

Right, so i'll be paying the expenses back...

As for the contract... I simply rang Orange and asked for the contract to be transferred to the company name... they credit checked the company, waived a £150 charge and said it'll be in the company name from the next bill onwards. The call plan, cost and length of contract all continues exactly the same.

The problem with setting up a contract from new on a company tariff is that you get a rubbish call plan... I think in future if I change from Orange i'll always set it up as a personal phone and a month in change the contract over to the company... that way you get the best of both worlds...

Have seen business contracts and agree they're rubbish compared to personal ones; so you had no problem at all transferring a personal contract into a company name??? If so then I'll probably try going down that route aswell.

**swamp** · 20 May 2010, 12:26

Every contractor should have a company phone. You will get a rubbish call plan, but the tax savings will more than make up for it. Also you will get better customer service. No Bangalore call centres for us Limited Companies

Mobile Phone for Personal Use but Claimed as Expense...