Reply to: Buying a mobile handset as an asset

[SteelyDan]

Can you buy an iPhone 4s for under £500?

[Clare@InTouch]

Thanks for the answer, Clare. Does the 500 pounds rule still apply?

We certainly wouldn't capitalise anything under £500, sometimes higher depending on the asset and how long its useful life is deemed to be.

[7of9]

I'd add it to expenses as normal, I wouldn't class it as an asset. For tax purposes there's no difference, it's either written off as an expense or capitalised and written off in the tax computation because of AIA. As technology moves so quickly these days it's also likely that you'll replace it within a couple of years, and that it'll be worth next to nothing by then too.

Thanks for the answer, Clare. Does the 500 pounds rule still apply?

[Clare@InTouch]

Slightly off the topic.

If I buy an iphone from apple directly, invoicing my limited company, shall I claim it as expenses or asset? My account mentioned that any computer item can be claim as expenses if it’s less than 500 pounds. Not sure if it applies to smart phone.

I'd add it to expenses as normal, I wouldn't class it as an asset. For tax purposes there's no difference, it's either written off as an expense or capitalised and written off in the tax computation because of AIA. As technology moves so quickly these days it's also likely that you'll replace it within a couple of years, and that it'll be worth next to nothing by then too.

[redgiant]

Slightly off the topic.

If I buy an iphone from apple directly, invoicing my limited company, shall I claim it as expenses or asset? My account mentioned that any computer item can be claim as expenses if it’s less than 500 pounds. Not sure if it applies to smart phone.

I would claim it back on your expenses in the usual manner.

[7of9]

Slightly off the topic.

If I buy an iphone from apple directly, invoicing my limited company, shall I claim it as expenses or asset? My account mentioned that any computer item can be claim as expenses if it’s less than 500 pounds. Not sure if it applies to smart phone.

[ASB]

If it was Vodafone, then they have a direct line to HMRC that could help you get out of paying your taxes....

pmsl

[TheFaQQer]

Have spoken to o2 several times now and each time they have said many people have contacted them before about the same scenario, and they have always advised that rather than buying out the rest of your contract for whatever length of time remains, just to add the company name into the personal details and set the DD from the company account until the end of the contract and then switch over to a business contract. If anything happens to me I'm suing them!

If it was Vodafone, then they have a direct line to HMRC that could help you get out of paying your taxes....

[Wanderer]

As for if the deals are better for consumers rather than businesses my Simplicity deal works out to be about £5 more expensive on the business for the same minutes/texts and 500mb of data.

How much is your phone bill then? You may end up paying £5 extra and that would outweigh the tax you avoid by putting the mobile through the business.

Personally, I wouldn't take out any "business" plan that costs more than a personal one - what's the difference? Why pay more?

[northernladuk]

If anything happens to me I'm suing them!

[heyindy]

Have spoken to o2 several times now and each time they have said many people have contacted them before about the same scenario, and they have always advised that rather than buying out the rest of your contract for whatever length of time remains, just to add the company name into the personal details and set the DD from the company account until the end of the contract and then switch over to a business contract. If anything happens to me I'm suing them!

[Waldorf]

My accountant (nixon williams) told me when I set up to have the contract in the company name and set the DD up from the company account.

This is their factsheet on this - http://www.nixonwilliams.com/images/...e%20Phones.pdf

[Greg@CapitalCity]

phone is in my name and used for mix business/personal use. I asked some fellow LTD contractors where i work and they all claim their mobile bills submitted as an expense, but your HMRC link tells me there is more to consider.

Yes, there is. As mentioned above, the phone needs to be in the company name, and paid for from the company bank account. I would bet there are many contractors who claim the full cost of a personal mobile phone - and the reasons this tends to happen are;
(a) The HMRC haven't caught them out (yet);
(b) Their accountant does not have a robust expense validation process so they just don't know about it;
(c) The contractor does not care about it, or just hasn't got around to getting it sorted properly - surely not this option

[diesel]

It depends. If the 'phone is in your name and solely for business use you're fine.

If the 'phone is in your name and used as a mix of business/personal then there may be a BIK.

Have a read through here: HM Revenue & Customs: Telephones - mobile

phone is in my name and used for mix business/personal use. I asked some fellow LTD contractors where i work and they all claim their mobile bills submitted as an expense, but your HMRC link tells me there is more to consider.

[Clare@InTouch]

Thanks for the reply.
I thought as a director that i could change DD to my business account, even if bills are in my name as director it would be no problem.

It depends. If the 'phone is in your name and solely for business use you're fine.

If the 'phone is in your name and used as a mix of business/personal then there may be a BIK.

Have a read through here: HM Revenue & Customs: Telephones - mobile