Mobile phone and Broadband

[Clare@InTouch]

No, the contract should be in the company name:

Employee’s own mobile – you reimburse the employee
Definitions or restrictions
You cover the costs of an employee’s mobile telephone by reimbursing the employee. The contract for the phone is between the employee and the phone company.

What to report, what to pay
Reimbursements of an employee’s monthly mobile phone tariff count as earnings, so:

•add them to the employee’s other earnings
•deduct and pay PAYE tax and Class 1 NICs using your usual payroll procedures
If you reimburse call charges in excess of those included in the employee’s monthly tariff, then:

•for amounts relating to private calls, you must add them to the employee’s other earnings and deduct and pay PAYE tax and Class 1 NICs through your payroll, as above
•for amounts relating to business calls, you have no tax or NICs to pay but for company directors and employees earning at a rate of £8,500 or more per year you must report on form P11D – section N – unless you have a dispensation covering these amounts

HM Revenue & Customs: Telephones - mobile

[kellycell]

Hi Clare,

thank you for this. What happens if I need to close my company down before the 12/24 months that the contract is for?

No, the contract should be in the company name:

Employee’s own mobile – you reimburse the employee
Definitions or restrictions
You cover the costs of an employee’s mobile telephone by reimbursing the employee. The contract for the phone is between the employee and the phone company.

What to report, what to pay
Reimbursements of an employee’s monthly mobile phone tariff count as earnings, so:

•add them to the employee’s other earnings
•deduct and pay PAYE tax and Class 1 NICs using your usual payroll procedures
If you reimburse call charges in excess of those included in the employee’s monthly tariff, then:

•for amounts relating to private calls, you must add them to the employee’s other earnings and deduct and pay PAYE tax and Class 1 NICs through your payroll, as above
•for amounts relating to business calls, you have no tax or NICs to pay but for company directors and employees earning at a rate of £8,500 or more per year you must report on form P11D – section N – unless you have a dispensation covering these amounts

HM Revenue & Customs: Telephones - mobile

[TykeMerc]

So I had a look at the deals for BBs and there are cheaper deals for consumer than business contracts.
So can I just get a consumer contract and then expense the monthly bill back via the company?

thank you.

I was advised not to do this as HMRC can get awkward about it even with detailed itemised bills. Apparently it's worse if like me you have a deal which includes more than enough minutes to mobiles and unlimited landline minutes to cover all business calls and any private calls. The argument being what proportion is business and what private, HMRC can and will simply disallow the lot as expenses.

[Clare@InTouch]

Hi Clare,

thank you for this. What happens if I need to close my company down before the 12/24 months that the contract is for?

You could swap the contract into your personal name - talk to the provider, they may allow it free of charge or they may then swap you onto a personal tariff.

[Boo]

I am moving to a new flat and was wondering if I can get the whole amount that I will be paying for my line rental and broadband expensed by my limited company. If that is the case, do I register with say BT with my company name?

Also I am buying a Blackberry -contract-. Again do I get this under my personal name or my company name?

thanks a lot.

Answers : yes, yes and company.

It is perfectly acceptable to put the phone and broadband lines under the company name because you will be using the internet and phone to chase business (jobserve etc). Your personal use of the internet comes under the heading of "incidental use" and will be disregarded. Note: This relies on everything being in the company name. Your personal use of the land line phone needs to be documented and paid back to the company.

There is a specific exemption for a single mobile phone : provided it is registered in the company name (not your own), you can use it for business and personal use without being taxed as a benefit in kind.

Hth,

Boo