Reply to: Mobile phone and Broadband

[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

[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.

[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.

[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

[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]

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.

[Jog On]

I do quite a bit of plan B work on the weekends and evenings as well- all through the same LTD. Not sure how this weighs up

[SueEllen]

Despite working from home much of the time I was advised that use of a home office that's part of my house should be expensed at £156 for the whole year which is what I did last year.

I was told I could do it two ways:
1. The straight forward claim way of £3 per week
2. The more complicated work out your bills way

My broadband is though the company as it's the only way I could ensure I would get the most reliable connection.

[xoggoth]

This one.


Employment income: household expenses: broadband internet charges

EIM01475 - Employment income: household expenses: broadband internet charges
Section 316A ITEPA 2003

We are often asked if employers can reimburse an employee’s broadband internet charges, tax free, under Section 316A.

The section applies to reasonable additional household expenses. So if an employee who begins to work from home under homeworking arrangements (see EIM01472) is already paying for a broadband internet connection at home, there is no additional expense. The employer cannot, therefore, reimburse the employee’s broadband internet charges, tax free, under Section 316A. Any such payment that the employer may decide to make should be subject to PAYE and NICs.

On the other hand, if the employee does not already pay for a broadband internet connection at home, and needs one in order to work from home under homeworking arrangements, the broadband fee is an additional household expense that the employer can reimburse, tax free, under Section 316A.

[TykeMerc]

Fair point Clare, I'll have a word with my accountant as since last April apart from a total of maybe 15 days in client and site meetings my work has been entirely home based via VPN and phone, maybe they missed a trick there.
All calls have been on my mobile though apart from telecons on an 0800 number so no actual land line phone call costs. My home phone and broadband deal is unlimited so again no extra costs directly attributable to business use.

[Clare@InTouch]

£65/month, wow that's a lot! What does everyone else claim / month on this?

It will depend on each person's bills and the time they work from home. If you're just doing admin work then we would usually suggest what Tyke does - £156 a year. You can claim this without needing to justify it.

If you work from home for a day or more a week then there's the possibility you can claim more, but you must be able to show logical calculations. There is a lot of guidance on the HMRC website about this, along with some examples:

Specific deductions: use of home: examples

As with a lot of things it's something to discuss in full with your accountant who can then advise on your specific circumstances.

[TykeMerc]

£65/month, wow that's a lot! What does everyone else claim / month on this?

Despite working from home much of the time I was advised that use of a home office that's part of my house should be expensed at £156 for the whole year which is what I did last year.

My mobile is literally speaking a personal deal, but the bill has the company name on the address and the DD is from the company account.
The phone and broadband I was advised that I couldn't claim for so I don't.
On matters like this I'm comfortable to trust the advice of the accountants as that's their field of expertise not mine.

[kellycell]

I claim all of my mobile phone bill and all the broadband which are both in my name (as advised by my accountant) as well as £65/month for use of home office

£65/month, wow that's a lot! What does everyone else claim / month on this?

[Jog On]

I claim all of my mobile phone bill and all the broadband which are both in my name (as advised by my accountant) as well as £65/month for use of home office

[SueEllen]

How about the Blackberry, can the contract be in my company’s name?

Yes.

There was a post on the front page of this site a couple of weeks ago explaining that a Blackberry, iPhone etc isn't considered a mobile phone by HMRC so if you want one to use for calls then you better off putting it in your company name.