Mobile Handset Purchase

[ladymuck]

Your accountant isn't the first to get that wrong - I asked a friend why they didn't claim for mobile phones and they said their accountant told them it wasn't allowed. I sent them the link to the expenses and benefits manual to pass on and, all of a sudden, the accountant was ok with it. They didn't even explain why they weren't aware of this change made years ago.

I get there's a lot of detail to wade through but that's their job, surely?

[Bomster1]

Your accountant isn't the first to get that wrong - I asked a friend why they didn't claim for mobile phones and they said their accountant told them it wasn't allowed. I sent them the link to the expenses and benefits manual to pass on and, all of a sudden, the accountant was ok with it. They didn't even explain why they weren't aware of this change made years ago.

I get there's a lot of detail to wade through but that's their job, surely?

Thanks for your response Ladymuck - would you mind sending me the link this document, so I can also try and bring my accountant up to speed? (Apologies if this is easy to find - I just want to ensure I choose the best document to send).

Also, probably more of a question for my accountant, but do you think I have chosen the correct categories in FreeAgent? I haven't put it down as an asset, instead just put it down as 'Mobile Phone' under 'Admin Expenses'.

Thanks in advance.

[northernladuk]

I expect your accountant will move it to an asset rather than expense. Put that in then drop them a mail and see if they want to move it.

Google is your friend. Tons of stuff about mobiles being allowed.

[WTFH]

I expect your accountant will move it to an asset rather than expense. Put that in then drop them a mail and see if they want to move it.

Google is your friend. Tons of stuff about mobiles being allowed.

Yes, as NLUK says, it's an asset, not an expense.

It's something the company owns. It is something which has value after it has been purchased.

[ladymuck]

Thanks for your response Ladymuck - would you mind sending me the link this document, so I can also try and bring my accountant up to speed? (Apologies if this is easy to find - I just want to ensure I choose the best document to send).

https://www.gov.uk/expenses-and-benefits-mobile-phones

[ladymuck]

Asset vs Expense is down to the value and what cut off you have. My accountant told me to treat anything less than £500 as an expense but there's no hard and fast rule.

If you think there will be no residual value after a year, there's no point treating it as an asset and faffing about with depreciation journals.

[TheCyclingProgrammer]

I used to treat handset purchases as an asset (new iPhones so typically between £500-£650) but no longer bother and they go down as a revenue expense (although I use "Computer Equipment Purchase" in FreeAgent, not "Mobile Phone").

[northernladuk]

Asset vs Expense is down to the value and what cut off you have. My accountant told me to treat anything less than £500 as an expense but there's no hard and fast rule.

If you think there will be no residual value after a year, there's no point treating it as an asset and faffing about with depreciation journals.

Both mine said exactly the same but both oddly moved them in to asset. Didn't bother me so let them get on with it.

[Bomster1]

Firstly thanks to everyone for the responses - I am now discussing the topic with my accountant .

I used to treat handset purchases as an asset (new iPhones so typically between £500-£650) but no longer bother and they go down as a revenue expense (although I use "Computer Equipment Purchase" in FreeAgent, not "Mobile Phone").

Not trying to be pedantic but do you mean 'Computer Hardware'? 'Computer Equipment Purchase' is under the assets section?

[northernladuk]

Not trying to be pedantic but do you mean 'Computer Hardware'? 'Computer Equipment Purchase' is under the assets section?

Which we've already said is probably the best way to deal with it so no issue with it being in Computer Equip Purchase?

My phone usage is minor compared to using it as a computer so makes perfect sense really. The HMRC exemption also mentions something to this end as well.