Limited company

Claiming mobile phone expenses in LTD

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Many people are launching LTD, mainly because of its advantages. A great example would be the possibility of including several expenses called costs of running a business. In this article, you can answer a question: Does a mobile phone take part in LTD expenses, when is the entrepreneur able to settle telecommunication services in LTD’s costs, or what is worth remembering when we include a mobile phone in the calculation. 

Can a mobile phone be included in LTD’s costs?

An HMRC has described detailed regulations of including chosen expenses in LTD’s costs. Moreover, according to these regulations, every entrepreneur can include in the calculation only these expenses, which are strictly connected with the conducted activity, and they serve to generate income. Nevertheless, the mentioned statement is quite general, so that it can raise doubts.

How then does it look when it comes to telecommunication services? In fact, there is a large number of industries where telephone contact is absolutely crucial. That is the reason why mobile phones and associated costs can be included in LTD’s charges. However, entrepreneurs have to remember a few essential principles…

What influence has got the concluded agreement on accounting mobile phone?

You’ve probably noticed that the British telecommunication operators have got two variants of the offer, one of which is intended for individual clients, and the second for companies (including LTD). This division is meaningful in the context of the described topic because only the mobile phone purchase and the subscription allow inserting 100% expenses in the calculation. In another case, just part of the cost would be legally written off.

So, if you’ve bought a mobile phone as a private individual, you can write off just a part of the costs. What is more, it depends on you and your mobile phone usage, what exact part of the expenses you will be able to write off. If you have one mobile phone for individual and business purposes, you can settle only these costs connected with running the business.

What is worth remembering by settling the mobile phone’s costs in the calculation? 

Everything is clear in theory – it only takes to launch an LTD, buy a mobile phone using a business offer, and write off all costs associated with the concluded agreement. Unfortunately, reality looks a lot different. You’re entitled to write off 100% of the costs only when your mobile phone is intended just for business. Besides, not every entrepreneur will be able to benefit from the opportunity. If your work doesn’t require the constant usage of a mobile phone for commercial purposes (for example, when you’re a driver), you won’t be able to write off all costs legally.

At the same time, it might provide some problems during potential control.