Mobile Phone expense Claim

[TheCyclingProgrammer]

Does this sound sensible?

If you pay the supplier you will need to add the value to her salary for the purpose of calculating Class 1 NIC.

If you reimburse her it's basically treated as PAYE income.

As you say, you may end up having no extra tax or NI to pay if she stays below the NI threshold and personal allowance but you have extra reporting requirements. You might as well save yourself the faff and just pay her extra salary.

[Geekman]

Thanks all for your replies. However reading thru :

HM Revenue & Customs: Telephones - mobile

and reading the below 2 headlines:

"Employee's own mobile - you pay the supplier directly"

and

"Employee's own mobile - you reimburse the employee"

My wife is an employee (not director) and her annual salary thru my limited company is about £5000 (she has no othr income). So even if the company reiumbersed her full tarrif back and that is counted as her additional income, I suppose that will still not attact any PAYE tax or NIC (I will check this perticular point with my accountant). Does this sound sensible?

[DirtyDog]

suggests we are able to claim all mobile phone expenses back whethere or not the contract is in company's name.

No it doesn't. It specifically says "The contract is between you and the mobile phone operator."

[TheCyclingProgrammer]

One other thing, I'm fairly certain the "one handset" rule only applies to phones provided for personal or business use. I don't think there is any limit on the number of handsets a company can provide to its employees *solely* for business use.

So your employer could in theory provide you with one mobile phone for personal and/or business use under the "one device" provision, no questions asked, and an additional handset/contract that is only for business use. You'd obviously need to provide evidence that it was only used for business use though and I'd imagine any claims like this would be subject to more scrutiny.

[TheCyclingProgrammer]

I'm not usually one to shout, "have you searched", but this was covered quite extensively recently:

http://forums.contractoruk.com/accou...ile-phone.html

In short, a company can provide an employee with single phone for personal use, which covers the handset cost and/or the contract cost if its in the company name. I don't believe either need to go on the P11D. It can also pay for the handset only and let you use your own personal SIM in it but you cannot claim for the line rental on a personal SIM if its in your name as this would be a BIK. If YourCo only purchases the handset (outright) then it should obviously be invoiced in the company name (I opt to treat mine as a capital asset).

It often makes financial sense to use a personal SIM though as they can often be cheaper if you're not a heavy user so don't let the fact you can't claim the tax back on this put you off.

If you use a personal SIM, you *can* claim for the cost of legitimate business calls. You can also do this for your landline. However you need an itemised bill as evidence for your claim. This obviously will not include any call costs within your allowance.

It will also need to be declared on the P11D which in my experience leads to HMRC wanting to deduct it from your tax code, even though you've entered the expense payment and equivalent claim for relief on your self-assessment. (Not that I claim for much, I now have a dispensation that includes telephone calls thankfully).

Why don't you look into various business tariffs, see how much they will cost you after allowing for the corporation tax saving and if it will save you money, get YourCo to open a new business contract.

[northernladuk]

Or you can keep them as personal and claim the business calls. Bit pointless with contract though as most of the calls will be free due to your call tariff.

If you do swap them to company phones check the tariffs. In my experience I had to take the business tariffs if the contract was with the company. The money still comes out of your pocket at the end of the day and all you are saving is the CT. Some business tariffs are more expensive than personal ones so negates the savings.

Make sure the phone contract is in the company name and paid for from the company account. Having a personal contract paid for by the company isn't enough.

EDIT : Did your accountant not explain this to you?

[Clare@InTouch]

In the context of the document you're looking at, "you" refers to the company. So the bit highlighted below would indicate that the contract has to be in place between the mobile phone people and the company.

Unless you're looking at a different part of the page than me....?


You provide an employee with one mobile phone
Definitions or restrictions
You make one mobile phone (or SIM card) available for use to an employee. The phone can be used for both business and private calls. The contract is between you and the mobile phone operator.
The same rules apply whether you pay for rental charges, business calls and/or private calls.
The definition of a mobile phone is a device that is designated or adapted for the 'primary purpose' of making and receiving phone calls over a public telecommunications network, even if that device can be used for other purposes.
Other devices that have telephone functionality (for example iPads, tablets, laptop computers and satellite navigation devices) use the internet to make and receive telephone calls and so do not meet the 'primary purpose' test to be classified as a mobile phone.
What to report, what to pay
You have:
no reporting requirements
no tax or NICs to pay

[Geekman]

I have read through most of the discussions around claiming mobile phone expenses. However reading thru -

HM Revenue & Customs: Telephones - mobile

suggests we are able to claim all mobile phone expenses back whethere or not the contract is in company's name.

I am the director of the company and my wife is an employee and shareholder (not director). both our phones are on personal contracts and are used for business and private calls. Can anyone please help me with whether I am able to claim the full monthly line rentle for my wife?

(I hope I am not looking at a wrong page on HMRC site or not totally mis interpreting the content)

Thanks in advance!

Geekman