Should I claim my mobile phone ?

[SueEllen]

Hmm, I just asked the question of my account controller at NW and he was adamant that a handset cannot be expensed by the company unless the SIM is also paid for by the company. To quote: "In order to claim for the handset, the contract (SIM) would need to be in the company name and paid for from the company account."

I wonder if this is a case of different accountants - even within the same company - interpreting ambiguous HMRC rules in different ways.

If the phone is a business phone why wouldn't you put a business paid for sim in it?

You are allowed to use business equipment like phones and computers for some personal use.

[Kess]

If the phone is a business phone why wouldn't you put a business paid for sim in it?

You are allowed to use business equipment like phones and computers for some personal use.

As mentioned earlier, I'm a light phone user and have found that personal SIM contracts tended to be more cost-effective. Having said that, however, I am now inclined to switch to a business one.

[TheCyclingProgrammer]

If the phone is a business phone why wouldn't you put a business paid for sim in it?

Because a personal SIM is often cheaper. As has been mentioned above, there nothing to stop you from using a personal SIM, you just can't claim it (although you can still claim for business calls). The handset can be provided for personal use as well as business use (I don't think the exemption places any restrictions on how the handset is used).

The cost of a handset provided primarily for business use is exempt under different legislation already (subject to the "no significant personal use").

In other words, I believe a company can provide as many handsets as it wants to an employee if it's solely for business use and personal use is not significant under s316 (the general rule for assets placed at an employees disposal). However there is a specific, separate exemption for the provision of phones for personal use and it's limited to one handset. (S319)

[TheCyclingProgrammer]

Hmm, I just asked the question of my account controller at NW and he was adamant that a handset cannot be expensed by the company unless the SIM is also paid for by the company. To quote: "In order to claim for the handset, the contract (SIM) would need to be in the company name and paid for from the company account."

I wonder if this is a case of different accountants - even within the same company - interpreting ambiguous HMRC rules in different ways.

The HMRC rules aren't that ambiguous. A business is allowed to provide one handset per employee.

It can also pay for the contract as long as it's in the business name, but not if it's a personal SIM.

Nowhere do they say that the handset is only allowable if it's used with a company contract.

Details of the exemption are here:
http://www.hmrc.gov.uk/manuals/eimanual/EIM21779.htm

Any of the following would be fine:

* Employee buys the handset and pays for the contract and claims the cost of business calls only. The calls are not exempt, but can be claimed, but you cannot claim the handset cost or line rental.

* Company pays for line rental, in company name, employee uses the SIM in their existing personal handset. The line rental is exempt.

* As above, but company also buys a new handset for the employee to use. Cost of handset and the line rental claimable.

* Company buys handset for employee to use for business and personal use but doesn't provide a SIM or contract. Employee is free to find the best deal for them or use a PAYG SIM. Line rental or topups are not claimable but business calls still are if there is an itemised bill as proof.

Edit: one more important point. The provision of a handset and/or line rental for personal use is *exempt* under s319 meaning it does not have to go on the P11d. However the cost of business calls are *not* exempt and must be reported on your P11D unless you have a dispensation, and they must then be reclaimed as a business expense on your SAR.

[Contreras]

Any of the following would be fine:

* Employee buys the handset and pays for the contract and claims the cost of business calls only. The calls are not exempt, but can be claimed, but you cannot claim the handset cost or line rental.

* Company pays for line rental, in company name, employee uses the SIM in their existing personal handset. The line rental is exempt.

* As above, but company also buys a new handset for the employee to use. Cost of handset and the line rental claimable.

* Company buys handset for employee to use for business and personal use but doesn't provide a SIM or contract. Employee is free to find the best deal for them or use a PAYG SIM. Line rental or topups are not claimable but business calls still are if there is an itemised bill as proof.

* Company buys a new handset and a PAYG SIM and provides this to the employee for business and personal use. Company owns the handset and pays for PAYG top-ups, in effect the 'contract' is with the company. Perfectly legit and an allowable business expense.

It's interesting reading the comments in this thread. By far the biggest saving you can make is to ditch the 'free' phone and buy it outright instead. Then get a SIM only deal, be that PAYG or monthly contract with 'free' minutes included.

[TheCyclingProgrammer]

* Company buys a new handset and a PAYG SIM and provides this to the employee for business and personal use. Company owns the handset and pays for PAYG top-ups, in effect the 'contract' is with the company. Perfectly legit and an allowable business expense.

It's interesting reading the comments in this thread. By far the biggest saving you can make is to ditch the 'free' phone and buy it outright instead. Then get a SIM only deal, be that PAYG or monthly contract with 'free' minutes included.

I agree. I happily use my own personal SIM but being able to get the phone through the company is helpful and it's good being free of a long term contract. Much more flexibility and IMO being able to shop around for personal deals is likely to save you more money than any tax saved by getting a business contract (depends on your usage pattern I suppose).

Not to mention if you can reclaim the VAT if on the standard scheme or if on the FRS and you can get the phone as part of a bigger (> £2k) capital purchase from the same supplier.

[Martin at NixonWilliams]

Hmm, I just asked the question of my account controller at NW and he was adamant that a handset cannot be expensed by the company unless the SIM is also paid for by the company. To quote: "In order to claim for the handset, the contract (SIM) would need to be in the company name and paid for from the company account."

I wonder if this is a case of different accountants - even within the same company - interpreting ambiguous HMRC rules in different ways.

Our advice is to have the contract in the company name and for the payments to be paid from the company account, this is the safest approach and it protects our clients from a challenge.

The context of your question was not the same as discussed in this thread. In your email to us you asked whether a personal SIM could be claimed, you did not say that the reason for wanting to do this is because the personal SIM is cheaper, which is why I and many others feel this might well be ok.

It would be unwise of us to suggest making claims that are ambiguous without good reason (i.e. because of the cost savings involved with a personal SIM compared with a company one), especially with something as common as a mobile phone as this is claimed by the majority of our clients.

I hope this explains.

Martin

[Kess]

In your email to us you asked whether a personal SIM could be claimed

Hi Martin,

Sorry, I'll have to correct you. I don't believe I asked if a personal SIM could be claimed on the company (which does sound dubious). The question I asked in my email was: "Is it feasible to buy a handset on the company but still use my personal SIM in it?" to which the response was: "In order to claim for the handset, the contract (SIM) would need to be in the company name and paid for from the company account."

That sounded pretty categorical: it's not possible to claim a company handset unless the SIM/contract is also a company one.

[Martin at NixonWilliams]

Hi Martin,

Sorry, I'll have to correct you. I don't believe I asked if a personal SIM could be claimed on the company (which does sound dubious). The question I asked in my email was: "Is it feasible to buy a handset on the company but still use my personal SIM in it?" to which the response was: "In order to claim for the handset, the contract (SIM) would need to be in the company name and paid for from the company account."

That sounded pretty categorical: it's not possible to claim a company handset unless the SIM/contract is also a company one.

Hi Kess,

I see. However, my point remain the same as we do not know if the personal SIM would be ok and therefore it is not something we would advise our clients to do.

The reason I felt the personal SIM would be ok in the scenario above is because of the cost savings compared to a company SIM. Your account controller was not aware of this.

I just wanted to make it clear that it wasn't down to different interpretations of the rules & that there was a reason for the difference between the advice given our clients and my opinion on a technichal matter, that's all

Martin

[TheCyclingProgrammer]

The reason I felt the personal SIM would be ok in the scenario above is because of the cost savings compared to a company SIM. Your account controller was not aware of this.

I might be misunderstanding you, but why would the underlying reason to use a personal SIM matter if no claim was being made for the costs of using the SIM?

The fact that the exemption allows for one mobile phone for personal use would imply to me that while the costs of a personal contract cannot be claimed, that how the employee chooses to use the phone is down to them. I'm not sure how HMRC could disallow the purchase of the handset on the basis that its being used with a personal SIM when personal use is explicitly allowed. I don't think Kess wants to claim the cost of his personal SIM, he just wants to purchase the phone through the company.