Earning an extra income: Mobile phone

Yes, you can claim expenses for business use of your mobile phone. Here are the key points to keep in mind:

For Self-Employed Individuals and Sole Traders

- You can claim expenses for the business portion of your mobile phone usage.

- If you use your personal phone for both business and personal calls, you'll need to calculate a reasonable split between business and personal usage.

- One common method is to review a few months of phone bills, determine the percentage of business vs. personal calls, and apply that percentage to your annual costs.

- You can claim this percentage of your total phone bill, including line rental and VAT (if you're VAT registered).

For Limited Companies

- A company can provide one mobile phone or SIM card per employee without it being considered a taxable benefit.

- The phone contract must be in the company's name and paid directly by the company

.- If these conditions are met, the entire cost can be claimed as a business expense, even if there is some personal use.

- If an employee uses their personal phone for work and is reimbursed, only the actual cost of business calls can be reimbursed without tax implications.

Record Keeping

- Keep detailed records of your phone bills and usage calculations to justify your claims if HMRC inquires.

- Review and update your business usage percentage regularly, at least annually.

Alternative Options

- Consider having a separate phone or SIM card exclusively for business use, which allows you to claim 100% of those costs.

- For limited companies, ensure the phone contract is in the company's name to maximize tax benefits.

Remember, the key is to claim only for genuine business usage and maintain proper documentation to support your claims.