Reply to: Mobile Handset Purchase

[BackupBoy]

You’re welcome. Two years. So this year - woohoo! ;-)

[Bomster1]

I’m with Gorilla too and I’ve not had any issues with my accountant there regarding mobile phone purchase and management. (Or on any other matter either)

I’ve just looked in FreeAgent and the purchase of my iPhone 7 in September 2016 is listed as a company asset under Computer Equipment. I have an EE sim-only business contract that’s paid directly from the company account and categorised as Mobile Phone.

Thanks for that info BackupBoy - really useful, as I am basically going to do the exact same thing. I spoke to EE earlier, and you can simple 'swap' to a business account without any hassle, I will then start paying the contract using my business account. My accountant confirmed she's happy with that whole situation, so it's actually a win-win situation as I am putting more through my business then I initially planned.

Out of interest, what asset life did you put on your iPhone? I would assume just 2 years? Is this fairly inconsequential?

[BackupBoy]

I must say it is concerning to me that my accountant is making this mistake/misjudgment.

Like you say, if they can't get this right then what else will they get wrong.

I'm with Gorilla who I researched on this site, and they came as advised by many

I’m with Gorilla too and I’ve not had any issues with my accountant there regarding mobile phone purchase and management. (Or on any other matter either)

I’ve just looked in FreeAgent and the purchase of my iPhone 7 in September 2016 is listed as a company asset under Computer Equipment. I have an EE sim-only business contract that’s paid directly from the company account and categorised as Mobile Phone.

[Bomster1]

I must say it is concerning to me that my accountant is making this mistake/misjudgment.

Like you say, if they can't get this right then what else will they get wrong.

I'm with Gorilla who I researched on this site, and they came as advised by many

[simes]

Quite.

If he can't get phone expenses right, what else is he missing?

[TheCyclingProgrammer]

So my accountant has stated the following

Without a contract in the company name, it will be hard to justify the cost of the handset. The handset should only be expensed through the limited company if it is used for business purposes only.

FFS, get a new accountant who understands HMRC expense rules. It's not complicated:

https://www.gov.uk/hmrc-internal-man...anual/eim21779

Section 319 ITEPA 2003 (as amended by Finance Act 2006)
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.

Therefore YourCo can provide a handset for you to use for both business and personal use. Yes, the contract must be in the company name in order for YourCo to pay for it without it being a BIK, but that's separate to the provision of the actual handset. Buy the handset and get an invoice in the company name. If you want YourCo to pay for the contract too, get that in the business name, or simply buy the handset through the business and pay for your own personal SIM to use in it.

[TheCyclingProgrammer]

But what's wrong with putting it in the original category and dealing with it as an asset?

Nothing. It's a matter of preference/accounting policy.

[ladymuck]

I never go with 'offers' direct from the provider's website.
You can get the same deals for half the price on comparison websites (personal contracts).

Good for you

The clue in my post was "a quick squizz".

[zonkkk]

Just had a quick squizz of EE SIM only plans and personal contracts are about £2 a month cheaper than business.

I find that EE business answer the phone really quickly and you get useful help. Never had that with personal plans.

I never go with 'offers' direct from the provider's website.
You can get the same deals for half the price on comparison websites (personal contracts).

[ladymuck]

Just had a quick squizz of EE SIM only plans and personal contracts are about £2 a month cheaper than business.

I find that EE business answer the phone really quickly and you get useful help. Never had that with personal plans.

[northernladuk]

So my accountant has stated the following

Without a contract in the company name, it will be hard to justify the cost of the handset. The handset should only be expensed through the limited company if it is used for business purposes only.

Vodafone's business deal was the same as the personal ones I seem to believe. You sure they are so much extra? Have you asked your provider if they can switch your current plan to a business one and see if they just offer the same price?

[Bomster1]

So my accountant has stated the following

Without a contract in the company name, it will be hard to justify the cost of the handset. The handset should only be expensed through the limited company if it is used for business purposes only.

[Bomster1]

What tariff are you on at the moment, and how much data?
I checked 1 month ago and I didn't think it was worth it on a proper 'Business Contract' as they are 20-30% more expensive than personal ones.

Yeah I found exactly the same, hence I just stuck with a 'personal' contract. I get 10GB, ultd mins for £12 a month on EE, 12 month contract, which I think is a reasonable deal.

[zonkkk]

If you're out of contract/on a pay as you go tariff it might be worth getting a contract including phone instead of buying the hardware separately.

Used to be that buying the phone separately was a lot cheaper but when I did the calculations recently, it was cheaper to take the combined monthly payment (Galaxy S9+, 2 year contract).

What tariff are you on at the moment, and how much data?
I checked 1 month ago and I didn't think it was worth it on a proper 'Business Contract' as they are 20-30% more expensive than personal ones.

[ladymuck]

If you're out of contract/on a pay as you go tariff it might be worth getting a contract including phone instead of buying the hardware separately.

Used to be that buying the phone separately was a lot cheaper but when I did the calculations recently, it was cheaper to take the combined monthly payment (Galaxy S9+, 2 year contract).

I have always bought the phone separate to the contract and get a 30 day SIM only contract. That way, when a provider annoys me that bit too much (like when Vodafone took down a tower at the end of the road from me and I stopped being able to get a signal) I can switch very quickly. Also means I can switch quickly when I spot a better deal, etc. It might cost a bit more in the long term but I CBA to do the sums every time.