Company iPad with personal data plan

[TheCyclingProgrammer]

OK so the rules about mobile phones are that it must be a contract in the company name and paid for by the company for it to be fully allowable.

But wait a minute, an iPad is NOT a mobile phone so the special rules for mobile phones do not apply to this situation.

So taking out a personal SIM only contract, using it primarily for company business use with insignificant private use is therefore be an allowable expense.

Take out the contract and the company can reimburse you every month in exactly the same way they do for every other expense that you incur and pay personally in the course of your business...

Hmm. Sure, it's not a phone but a SIM only data plan is arguably the same as a broadband internet connection. For that to be allowable, the contract must be in the company name. If the contract is in the employees name then the company is strictly speaking paying off an employees debt. I'm not sure it would be allowable, if questioned. Nor could you reasonably apportion the used data between personal or business use.

I still don't think there is an issue with the OP paying for a personal plan and using it in the company provided iPad, but I don't think the SIM plan would be claimable.

Edit: OTOH, the rules regarding home broadband are a bit more subtle than I realised. If the employee is reimbursed for "additional costs" above what they already pay, for business use, then it is allowable.

http://www.hmrc.gov.uk/manuals/eimanual/EIM21617.htm

Seems to relate to "household costs" so not really clear where something like a mobile broadband connection fits in to HMRC rules. Maybe a bit too high tech for Hector.

Bottom line: I wouldn't worry too much about this.

[Wanderer]

OK so the rules about mobile phones are that it must be a contract in the company name and paid for by the company for it to be fully allowable.

But wait a minute, an iPad is NOT a mobile phone so the special rules for mobile phones do not apply to this situation.

So taking out a personal SIM only contract, using it primarily for company business use with insignificant private use is therefore be an allowable expense.

Take out the contract and the company can reimburse you every month in exactly the same way they do for every other expense that you incur and pay personally in the course of your business...

[TheCyclingProgrammer]

If my name were Hector, I would suspect that the need for a personal SIM means that the device is not wholly for business use.

Hector can suspect all they want, but if the OP can show how that any personal use is not significant and that the only reason to get a personal SIM is that it is cheaper, then I'm not sure how it makes any difference.

If anything, it means that OP is technically paying slightly more tax than if their business paid for a more expensive plan on a business contract and used it to reduce its taxable profits.

[SussexSeagull]

Is the iPad purchased outright and not locked to any provider?

If so the data plan you have purchased is linked to the SIM card which may or may not be put in the iPad.

[expat]

If my name were Hector, I would suspect that the need for a personal SIM means that the device is not wholly for business use.

[TheCyclingProgrammer]

[/B]

I like that and will bear it in mind when my current contract runs out (I'm sim-only as well).

Also worth bearing in mind that you can still claim for legitimate business calls if you can prove them (e.g. itemised bill) even if the SIM is in your name. Not something I've ever bothered with as I don't exceed my minutes although I have on my home phone.

[cojak]

If the device was a legitimate company expense (i.e. it was purchased wholly and exclusively for business purposes and any private usage is not significant), then I don't see how it's any different to a company purchasing a mobile phone for their employee and the employee using their own personal SIM in it because it's cheaper (which is exactly what I do and I don't expense it).

I like that and will bear it in mind when my current contract runs out (I'm sim-only as well).

[TheCyclingProgrammer]

Hi Jessica

Thanks for your reply. So if I didn't settle the cost at all, but rather just paid it personally and never reimbursed it from the company, there would be no issue with the ownership of the ipad being questioned?

Cheers
Matt

If the device was a legitimate company expense (i.e. it was purchased wholly and exclusively for business purposes and any private usage is not significant), then I don't see how it's any different to a company purchasing a mobile phone for their employee and the employee using their own personal SIM in it because it's cheaper (which is exactly what I do and I don't expense it as it's in my name). That said, there are special rules for mobile phones and personal usage isn't really an issue anyway.

Using a personal plan and paying for it yourself in order to save the company (and ultimately you) money has no bearing on whether you actually use it for business or personal purposes.

If there is anything to worry about, it's not the fact that your using a personal SIM. HMRC probably won't care about this. If they challenge anything, it would be whether or not the iPad itself was a legitimate business expense - regardless of how you pay for the SIM - and if you have to justify anything, it will be that. If you're happy you could do this, in the event of an enquiry (and it seems like you are), then forget about it.

[malvolio]

So the ipad isn't a personal asset: I run an education company and the ipad is there to run lessons from, as well as to mark papers and annotate essays. I have no problem justifying it as a company expense.

I was just concerned that if I did charge a contract in my personal name straight to the company account (it is cheaper to do this as business plans tend to be more) would HMRC say no.

So how much do you charge Tesco for the cost of you getting there to buy your groceries?

You and YourCo are two different legal persons. Don't mix them up, and don't use one to pay for the other's costs. That way lies madness.

[matt2012]

So the ipad isn't a personal asset: I run an education company and the ipad is there to run lessons from, as well as to mark papers and annotate essays. I have no problem justifying it as a company expense.

I was just concerned that if I did charge a contract in my personal name straight to the company account (it is cheaper to do this as business plans tend to be more) would HMRC say no.

[northernladuk]

That's not quite what Jessica said - you would be unlucky to get caught, and HMRC have better things to do. That doesn't mean that you won't get caught, and doesn't mean that there won't be any comeback from essentially using the company to pay for a personal asset.

You would be unlucky, so you've got to ask yourself one question: "Do I feel lucky?" Well, do ya, punk?

This ^. The rules say no, real life says you probably won't get caught. It's your choice. Should be pretty easy if you work out the actual figures on your 20% saving. Remember anything bought by the company isn't free.

[DirtyDog]

Hi Jessica

Thanks for your reply. So if I didn't settle the cost at all, but rather just paid it personally and never reimbursed it from the company, there would be no issue with the ownership of the ipad being questioned?

Cheers
Matt

That's not quite what Jessica said - you would be unlucky to get caught, and HMRC have better things to do. That doesn't mean that you won't get caught, and doesn't mean that there won't be any comeback from essentially using the company to pay for a personal asset.

You would be unlucky, so you've got to ask yourself one question: "Do I feel lucky?" Well, do ya, punk?

[matt2012]

Hi Jessica

Thanks for your reply. So if I didn't settle the cost at all, but rather just paid it personally and never reimbursed it from the company, there would be no issue with the ownership of the ipad being questioned?

Cheers
Matt

[Jessica@WhiteFieldTax]

Technically if the contract is in your name, then settling it via company is company settling your debt, which is a BIK / Class 1A issue on settling directors pecuniary liability.

In reality many people do similar, and you would be very unlucky if it ever caused a problem. For the most part, Tax man has better things to do than argue over comparatively small issues like this.

Personally I wouldn't worry about it.

[matt2012]

Hello

I've just bought an ipad through my company as it is going to be used for the company's activities and I am happy to justify this.

I went with the 3g model and I am now looking to buy a data plan for it. The business data plans all seem to be more expensive than personal (not a VAT registered company) and therefore the cheapest way to do it is to charge a personal contract in my name to the company, using a direct debit from the company account. Is this going to be acceptable?

Alternatively, if I paid for the data plan myself and didn't involve the company in the cost would HMRC then argue that the iPad was a personal, rather than a company, belonging?

Cheers,
Matt