Paying for iPhone from personal bank account

[happyfeet75]

I have gone back to the accountant to ask for clarification, as they appear to be suggesting that only buying a handset, with a contract, is advisable, if it is for both business and private use.

So I asked if top-up vouchers constituted a contract - and if they were paid by the business too, would that satisfy both points of the exemption, and thus allow private use too with no reporting necessary. (Phone + SIM + monthly DD top-up via business account a la GiffGaff). They had not come across the concept of cash-less vouchers much before (which you can apply to mobiles), so they are doing some more digging.

I'm hoping this voucher provision is HMRC's attempt at filling in for what must be a very common scenario for small limited companies and sole traders for whom it's not cost effective to have a 12/24 month contract.

I don't use call time or sms much anyway, but will do for business - but not enough to merit being locked in for two-years at £50pcm. Whether that's a reasonable rationale I don't know.

The idea of putting my personal SIM in a company phone would seem to instantly blow the 'wholly and exclusive' one-handset-only exemption out the water, no? Or does 'wholly and exclusively' mean 'mostly'?

I am SA myself, and would prefer to put legitimate business things through MyCo and avoid impacting my personal paper-work too much.

Will update when there's more info.

[PerfectStorm]

Three do unlimited SIM packages for about £30. Just get that on the business account and buy a handset with the business debit card.

Contracts - as we well know - are for mugs!

[psychocandy]

Yes next time I'll think about buying the phone via company and then paying for a personal sim only contract.

This time I just went for personal contract with free phone so you're in effect paying for the phone over the two years.

I looked into doing it via business but of course then the providers want to put you on a business tariff which costs more so it all ends up pretty pointless.

Whether its worth saving the 20% by stumping up the £500 or so from the company (rather paying it off over 2 years on a personal phone/sim contract) and then getting sim only. We'll see.....

[TheCyclingProgrammer]

Did you ask your accountant why they don't believe it's acceptable to put a personal SIM in a company phone? Forget the wholly and exclusively thing, there is a specific exemption for a single phone for personal and business use.

It's your business so you're going to have to make your own call but I certainly don't lose sleep over buying a handset only through the business and then using my personal SIM in it.

[happyfeet75]

Three do unlimited SIM packages for about £30. Just get that on the business account and buy a handset with the business debit card.

Contracts - as we well know - are for mugs!

Ok thanks I will look at this, since they do a '1 month' contract. Don't know how the accountant will think this is any different from GiffGaff goodybags tbh (i.e. you can cancel it after 1 month).

Did you ask your accountant why they don't believe it's acceptable to put a personal SIM in a company phone? Forget the wholly and exclusively thing, there is a specific exemption for a single phone for personal and business use.

It's your business so you're going to have to make your own call but I certainly don't lose sleep over buying a handset only through the business and then using my personal SIM in it.

TBH I think s/he is just following the company's cautious guidelines. There has been conflicting information provided to me in subsequent emails. Will probably just get the handset and get on with my life. Or get another accountant (big co, should know the ropes).

I guess I just wanted to stay with GiffGaff, and port my existing number into a company-name SIM, and use GoodyBags. Will look at porting over to a SIM-only 'one month' contract (effectively what I have with a GoodyBag). Porting the number to a company one-month contract with Three would at least keep the accountant happy.

Cheers all

[ContrataxLtd]

Ok thanks I will look at this, since they do a '1 month' contract. Don't know how the accountant will think this is any different from GiffGaff goodybags tbh (i.e. you can cancel it after 1 month).



TBH I think s/he is just following the company's cautious guidelines. There has been conflicting information provided to me in subsequent emails. Will probably just get the handset and get on with my life. Or get another accountant (big co, should know the ropes).

I guess I just wanted to stay with GiffGaff, and port my existing number into a company-name SIM, and use GoodyBags. Will look at porting over to a SIM-only 'one month' contract (effectively what I have with a GoodyBag). Porting the number to a company one-month contract with Three would at least keep the accountant happy.

Cheers all

Hi Happyfeet75

For what it's worth, I think you will be fine buying a handset in the company name and paying for this from the company account. You then decide what to do with the SIM, put in a personal sim and pay for it personally or get something in the company name and pay for it from the company account.

I've got a couple of clients who are doing the GiffGaff thing and I don't see too much of a problem with it to be honest. Sign up to it in the company name and pay for the monthly recurring fee from the company account and you should be fine.

All you want to avoid is having the company pay for a personal liability from the company account as this has BIK implications and I feel the above avoids this. Also, at the end of the day the monthly cost is probably £10 or so which isn't much of a risk either.

Hope this helps.

Martin
Contratax Ltd

[TheCyclingProgrammer]

Good advice from Martin - as he says the main issue that arises here in terms of a BIK is when YourCo pays for any liabilities in your name. So even if you had a contract that you used exclusively for business, if the contract is in your name then the liability to pay it is yours, which is why YourCo can't pay for it without there being a BIK (I believe the term is settling of a Director's pecuniary liability).

Remember even if you pay for a personal SIM and use it, you can still claim for specific business calls as long as you can keep some evidence of these (e.g. an itemised bill identifying the business calls). What you can't do unfortunately is claim for any portion of the rental.

[ASB]

I just wonder whether any of the accountants have had any challenges in practice.

One should buy the phone and contract through the company on a company tariff etc (notwithstanding the many permutations). In practice lots of people will just put through the personal phone contract, possibly having amended it to be addressed to the LTD.

As long as it is just one phone and one source of calls does HMIT ever complain in an investigation. Or more specifically do they ever complain and disallow (of course they can).

[ThomserveBAS]

I have purchased my last three iPhones via my LTD, in all three instances I have purchased them on my personal card (hey...gotta love those points/cashback deals) and then completed a "transfer of assets" form which basically transfers ownership of said device to MyCo with all that entails.

In previous years, my wife (a director) had my castoffs, but this year she's got a new phone through the business.

Both phones are on (legacy) SIM-only deals with Three (which much to my amusement they keep trying to entice me off but I ain't budging) where we get unlimited everything for £15/month. Best of both worlds as far as I am concerned - business contracts tend to be very over priced so I stick to sourcing my own contracts.

[happyfeet75]

Thank you all, CP and Martin and others v helpful

Account has come back with

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

As stated you can provide your employee with a mobile phone or SIM, the top up will be made personally but the company can reimburse you the business portion.

(Which, tbh, I do not see that precise information on that link but oh well)

So I can get a handset through the business and put a personal sim in it, despite being told handset must be 'wholly and exclusively' for business just the day before. Guess even professionals find this stuff quite challenging.

Will just get the handset and put my personal sim in it for the moment, and look at porting to a sim in the MyCo name at some point, seems more cost-effective.

The idea of putting it through on my personal Amex to get the airmiles then doing a transfer of assets is enticing, but I'll wait until I've got the hang of the basics first!

Regards