Claim for phone and broadband costs

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Introduction 

As a UK limited company contractor or small business, what can you claim for phone and broadband costs? You’ll likely incur business phone and broadband when contracting and running your own company in the UK. Therefore, is there a tax-efficient way to claim phone and broadband costs as business expenses? As an owner of your company, can you also claim our business mobile phone expenses besides your business broadband and telephone costs? When working for yourself, you may ask what you can claim as a contractor, and the questions on phone costs will arise when considering claiming phone and internet on tax. In this guide, we’ll look at when you can claim broadband expenses working from home and how to work this out. We’ll research what to think about when you claim phone expenses and expense business broadband costs.

Claim broadband working from home

What are the primary considerations when you claim your phone costs and broadband expenses while contracting or trading in the UK? There are two critical points for you to note:

  • Any expenses for mobile phones, business broadband and phone lines you incur must be wholly and exclusively for your business.
  • Is there a duality of purpose? By this, we mean is the cost you plan to claim as a business expense a cost you’ll incur on a personal level regardless of any business use? If yes, you’ll pay extra tax if you claim for such costs through your business.

Indeed, these are vital considerations, and you should bear these in mind when you claim for phone and broadband costs through your business.

Initial thoughts 

First thoughts 

As a contractor, let’s research how to claim phone expenses and broadband costs through your company. Moreover, let’s also look at the considerations when making claims for business telephone and broadband charges. We’ll consider whether you can claim internet on your tax return if you’re self-employed. To summarise, any working from home broadband expenses and contractor phone charges may add up to a significant amount. Therefore, you should make a contractor claim if you incur these costs. In this guide, we’ll consider all the angles regarding claiming phone on tax and claiming internet on tax.

What is the recent history & how to claim mobile phone as a business expense? 

If you work in IT, you may ask what I can claim as IT contractor tax deductions. What’s more, as part of a claim for phone and broadband costs, you may ask if I can claim my mobile phone as a business expense. In fact, can I buy a mobile phone through my business too? Some employers provided employees with mobile phones for work twenty or so years ago. Those who did provided their employees with a Benefit in Kind (BIK). At that time, the BIK was £200. This was taxable on the employee through the PAYE tax code applied to their salary.

What happens today?

Today, when claiming a phone bill on tax, an employer can provide each staff member with one mobile phone for business use with no associated BIK. If you run your own company, it can do this for you, too. Therefore, contractors can do this through their company regarding a mobile phone. As a result, you can claim the charges for your business mobile phone expenses or SIM card tax-free, and there is no BIK.

As part of your small business mobile phone tax deduction, getting the bills in your company name is advisable. Therefore, you should ensure your mobile phone contract is in the name of your contractor limited company. It’s key to note that although you may use your mobile phone for work and personal calls, you should ensure any token personal use is ‘reasonable.’ Following this advice, you can claim phone expenses for your mobile usage, and these costs are tax-deductible.

Common questions

Some common questions around phone and broadband charges will often arise from UK contractors. Therefore, for those who are looking to make a small business internet and phone claim, such questions will include:

  • Can I buy a phone through my limited company?
  • Can you claim broadband as a business expense?
  • How much internet can I claim on tax?
  • Can I deduct internet as a business expense?
  • Can I deduct my home internet as a business expense?
  • How much of my internet bill is tax-deductible?
  • How much internet can you claim on tax?
  • What percentage of internet bill is tax-deductible?
  • Can I claim my home phone charges as a company expense?
  • How much of my phone bill can I claim?
  • What can I claim for my mobile phone costs?
  • Is wi-fi a business expense?
  • Is there VAT on broadband?

In this guide, we’ll consider all the above and examine what internet and phone expenses you can claim.

Claim for phone and broadband costs -what can you claim?

Let’s now research what you can claim for your small business phone and broadband costs. 

Mobile phone expenses 

When you’re a contractor or small company owner and use your mobile for work reasons, you can claim your mobile phone costs. However, you should ensure the personal element is only minor. If you’re starting your own business for the first time or have even been trading for a while and your mobile phone contract is up for renewal, you may get your new one in the name of your limited company.

When deciding on a mobile phone deal for your company, you should aim to choose the best package. You can do this when you research mobile phone contracts for small businesses. When you search, you should consider the terms of the monthly tariff. As part of this, you can ensure it fits your predicted business call requirements. Also, as most mobile phone contracts are for 24 months, you must consider this too when purchasing a new one.

Business landline and broadband 

Consider a claim for phone and broadband costs if you have a dedicated business telephone line and broadband. Can you claim the business line rental and broadband costs through your company? You can claim phone expenses and your contractor business broadband cost. However, claiming for your business landline cost is on the basis you’ll use your contractor’s business phone line for business calls only. In addition, the contract and bills for your dedicated business broadband and landline must be in the company name. As a result, you can claim the business phone costs and save tax on the landline for business use.

What’s more, if you work from home and have a dedicated phone line for work purposes, you may have your own home office. Two further things you can think about here concerning tax relief when you work from home are:

A further thought is that having a dedicated phone number for your company will look more professional. This is how it’ll look to your clients and contacts. Indeed, when shown on stationery such as business cards, letters, invoices, etc., it’ll remind them of your business.

What if you make work-related calls on personal phones? 

When you claim phone and broadband costs, please remember that business call charges on your personal mobile or landline phone bill are genuine business claims. Your company can claim phone expenses for such work-related calls. What’s more, it can reclaim the VAT on business phone charges. However, you can’t claim any part of the line rental. This is because you’ll incur the cost of your personal mobile or landline phone whether you use it for work reasons or not.

Furthermore, splitting out the cost of work-related calls can be difficult when you claim phone expenses. This is because companies now package phone costs with free minutes, etc. Therefore, if you’re unable to separate work calls from personal phone bills, you can’t claim them. This is due to the duality of purpose rules. To explain further, business calls incur no extra cost because of the tariff you pay for your phone calls.

Business broadband expenses -can I claim internet as a business expense? 

How can you claim business broadband costs? 

Can I claim broadband as a business expense (UK)? When you’ve your own company and are looking to claim for phone and broadband costs, you may ask can I claim broadband as a business expense? As part of a broadband for business (UK) service, you’ll require a small business internet connection to access e-mail and work-related websites. Therefore, when you choose a company broadband service, you should look for the best deals available for your small business’s broadband cost. There are several factors to consider if you’re going to use the internet for business use. When finding the best broadband deal, that’ll include the download speed. Therefore, it’ll be good to research business broadband packages before you choose the one right for you.

Many limited company contractors and business owners may consider whether I can claim my internet bill as a business expense. It’s key to remember you can claim business broadband costs if you have a dedicated business broadband connection. Furthermore, as part of your business broadband at home, you should only use the phone line for business purposes. When you do this, you can search the market for good broadband for small business deals.

The new business phone line and broadband account should be in the company name. As part of your business broadband costs, HMRC accepts there may be a minor amount of personal usage.

How do you calculate home internet business expenses & percentage of phone bill tax-deductible?

When you work at home, what should you consider when determining whether you can claim home internet as a business expense, and when are internet expenses tax-deductible? If your home office broadband is in your personal name, you may ask how much of my internet can I deduct for business. The general rule for home workers who use business broadband is you can’t claim your home broadband cost as a contractor expense unless you can split out the business broadband costs element or approximate business element.

It’d be fair to say if you use your home office broadband significantly for work reasons and estimate your contractor broadband costs to be 50% of your overall usage, you’re ok with claiming internet as a business expense. Therefore, you can claim 50% of the broadband cost as your internet tax deduction. In turn, broadband for the home office will save company tax. On the other hand, if you’re self-employed, you could make the relevant claim for the cost of broadband charges as a home internet tax deduction via your personal tax return.

If you have no broadband contract at home and require internet access (e.g., on your phone) to carry out your trade, you can claim any internet for business-related costs for your company. As a result, you must work out your home business internet deduction based on the actual business cost.

How do you choose a provider for business broadband and phone (UK)? 

When you research, there are plenty of deals for a business phone line with broadband. Most contracts for phone and broadband will last for two or even three years. However, some phone and broadband deals for small businesses (UK) are better than others. When you compare the current deals for business phone lines and broadband, you should look at the cost, speed, download limits, and other factors to find the best small business broadband provider.

There’s plenty of choice regarding providers for business phone & broadband. Some leading providers for business landline phone contracts are BT, Virgin Media, Sky, PlusNet, TalkTalk, and XLN. As a result, you can compare business phone lines and broadband to find the best deal for your company.

Claim for phone and broadband costs -other thoughts 

There is more to consider when you look at small business broadband and phone deals, as shown below. 

Full fibre broadband 

This type of broadband is relatively new on the scene, and most of the top UK suppliers can provide it. It’s high-speed broadband that uses fibre optic cables to transfer data. This is faster than a typical broadband connection that uses standard copper cables. 

Wi-fi for small business (UK) 

When you purchase a business phone and broadband for business package, you can add wi-fi for an additional monthly cost. What’s more, that’ll give you an online network. You can connect your business devices to the internet when you have this for your working from home broadband.

Static IP address 

An IP address is a unique digital reference for a specific point on the internet. Therefore, what’s the benefit of getting a static IP address as part of your phone line and broadband for business? This is a fixed Internet address rather than one which is dynamically assigned to you each time you connect. When it’s static, it always stays the same, making it possible for users and other businesses to find you online. You’ll require a static IP address to host your website or run an e-commerce business. Most UK companies charge a small extra fee for a static IP address.

Download/upload speed 

You may want to check the download and upload speeds when you have broadband for your business at home. You can do tests online. Generally, a good download speed is at least 100 Mbps, while a good upload speed is at least 10 Mbps. You may have to do further research if you have customers connected to your services and are streaming data to them. As a result, you can investigate some high-speed internet for the home office.

Other considerations

What should you consider when claiming mobile phone expenses (self-employed UK)? 

If you’re a sole trader, the rules above on business-only calls apply. Therefore, you must identify work-related calls on your mobile and home phones. Once you’ve done so, you can claim mobile phone on tax on the business element. When you do this, you’ll include the business claim as an expense on your Self Assessment tax return. HMRC have further guidance on expenses when you’re self-employed, which is worth a read,

Claim for phone and broadband costs for business -what is HMRC guidance? 

Please refer to the HMRC manuals below for HMRC’s technical advice on small business telephone and broadband. These relate to the tax treatment of business phone and internet costs, including telephone-type expenses.

  • EIM32940 –Telephone charges. This manual explains why you cannot claim line rental on the phone used for both business and personal use.

You should not claim these costs if there’s `excessive’ personal use of your mobile phone charges, broadband charges, or lots of personal use on your business line. If you proceed to claim, HMRC will treat these as taxable benefits:

  • The company must pay Class 1A National Insurance; and
  • The employee must pay tax on these. 

Can you claim VAT on phone bills & internet? 

If your company is VAT registered, it can claim VAT on any business-related phone and business broadband costs. However, this is on the basis the contract(s) for the phone & broadband are in the name of your limited company.

Final thoughts 

It’s key to remember that it’s best practice to claim for phone and broadband costs you use for business. If you work from home sometimes, or much of the time, and use your home office broadband for work reasons, you can make a business claim as contractor expenses for what you think is the fair business element. We cover all the considerations for mobile phones, internet and phone service for small businesses above. Furthermore, we explain how you can save tax on these costs.

Most UK contractors and company owners claim their mobile phone costs as company expenses. Moreover, many will claim expenses for the business element of their broadband charges. If you want a work landline, doing a business phone and broadband comparison is best to find a good deal. Therefore, please ensure you claim phone and broadband costs if you use the business phone and internet service for work purposes. If you enjoyed this guide, please read our article, which covers tax tips for contractors.

Link to Contractor Advice UK group on

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Published On: April 6th, 2024 / Categories: Contractor Tips, Expenses, Expenses Guides /

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