Putting Mobile Phone Costs through your Limited Company

VAT

To reclaim VAT on mobile phone costs via your limited company the contract for the phone as well as the associated invoices need to be in the name of the business.

If this is the case, then you can reclaim VAT on the full cost of the invoice, including any associated line rental.

However, this assumes that your business has a policy that employees cannot use the phone for private calls, and any private calls that breach this policy are genuinely minimal. If you are a director of a limited company, it may be hard to argue that you personally breached the rules of your own business.

If you have substantial private calls on this contract, you will need to apportion your input VAT claim to reflect line rental plus business use only.

Corporation Tax

Like VAT the contract should ideally be in the name of the company to claim the full cost against your profits for Corporation Tax.

Unlike VAT where the contract is not in the name of the business, you can still claim a portion of the costs against Corporation Tax, but the claim needs to be apportioned to represent only the business portion of the call charges, excluding any line rental.

For advice on the above, please email info@spondoo.co.uk or call us at 02033 259 341.

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Information provided on the site is merely guidance that may change in line with UK law and regulations. Users must not consider this to be financial advice or their sole resource when making any financial decision. Spondoo is a trading name for Accounting SQL Limited, authorised & license accounting firm under the Institute of Financial Accountants.

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Putting Mobile Phone Costs through your Limited Company - VAT & Corporation Tax

VAT