A question we get asked regularly is around what businesses can claim for phone and internet expenses. As always the rules differ for sole traders and limited companies!
Limited Company – Can I claim for my home phone/broadband?
Unfortunately much to many business owners annoyance, the answer is usually no. The old HMRC rule of “wholly, exclusively and necessary” applies. And phone bills or internet bills rarely meet the exclusively rule. This is because the monthly line rental costs are used by you personally in the home as well therefore are automatically ruled out.
For phone bills you can claim individual calls outside of your regular plan. For example if you have to call overseas for work and this is not included in your monthly tariff you could claim this amount. To do this you would need a fully itemized phone bill showing the calls you will be claiming for.
The only exception is if the phone and internet subscriptions are in the businesses name. But you would need to be able to show these are solely for business use otherwise a P11D employee benefit would be payable.
For some home workers they install a separate internet line into their home for their business, this would of course be a business expense.
Limited Company – Can I claim for my mobile phone?
You are allowed to put a mobile phone for each employee through the business. This phone can then be used for personal use alongside the business use. This is a handy way to save yourself some money personally if you are happy to run your business and personal life through one phone!
Sole Trader – Can I claim for my home phone/broadband?
For sole traders if you are using one phone for both business and personal use you can claim a percentage of the cost as a business expense. The best way to do this is to look at the previous few months phone bills, highlight all your business calls, and then work out the percentage of business vs personal. Say its 60% business, you can then claim that amount of your phone bill.
