Can my company pay for my mobile phone?
Yes, and it's one of the better perks of running your own company, as long as you set it up the right way.
The rule is simple: the company can give you one mobile phone, and the whole cost is tax-free, the handset, the monthly line rental, and your calls. The clever bit is that it stays tax-free even if you also use the phone for personal calls and texts. You don't have to split out work from personal.
There's one condition, and it's the thing everyone gets wrong, so read the next part carefully.
The safe way vs the trap: whose name is the contract in?
This single choice decides whether the phone is tax-free or whether it hands you a tax bill.
The safe way, a company contract. The phone contract is in the company's name, the company pays the provider directly, and the company gives you the phone to use. Done this way, one phone is tax-free even with personal use. This is the route to take.
The trap, your own contract. The phone is on your personal contract, in your own name, and the company pays you back for the bill. This is not tax-free. HMRC treats that money as a payment to you, so it can land on your tax bill. On a personal contract, the only part the company can claim is the cost of your actual business calls, and you'd have to pick those out of your itemised bill, line by line. The monthly rental and your personal calls don't count.
So the difference between the two is huge. Same phone, same usage, but a company contract is clean and tax-free, while paying back a personal contract is fiddly and can cost you. If you're going to claim a phone, put the contract in the company's name.
Can my company pay for my home broadband?
This one surprises people, so here's the honest answer.
If your home already has broadband, there's usually nothing to claim. You were already paying for that line before you started working from home, so working from home doesn't add any extra cost, and the company can't claim a cost that isn't really there.
If you didn't have broadband before and you got a connection only because you need it to work from home, that's different. That new line is a genuine extra cost of working, and the company can cover it. The clean way is to put the new connection in the company's name so it's plainly a business cost from the start.
The simple test is the same one behind all of this: the company can cover the extra cost that working from home creates, but not a cost you'd be paying anyway. An existing broadband bill is a cost you'd have regardless, so it stays personal.
A quick example
Say you run a small company from home and you want to put your phone and internet through it.
- You take out a new mobile contract in the company's name at £20 a month. The company pays the provider directly. The full £20 a month is tax-free, even though you also use the phone for personal texts. That's the safe route.
- You already had home broadband at £30 a month before you started working from home. There's no extra cost here, so there's nothing for the company to claim. The broadband stays your personal bill.
If instead you'd had no broadband and put in a new £30-a-month line in the company's name purely to work, the company could cover that £30, because it's a real extra cost of working.
How SimpleReturns handles it
Tell us about your phone and broadband and we add the right amount into your costs, the full bill for a phone in the company's name, the business-call share if it's on your own contract, and a new work-only broadband line where it qualifies. We keep an existing personal broadband bill out of the company, so you don't accidentally hand yourself a tax bill. You see every figure before anything is sent.