Answers · UK 2025/26
Can I claim my mobile phone as a business expense?
Sole traders can claim the business-use proportion of their mobile bill against profits. Limited companies can provide one mobile phone contract per director or employee, in the company name, with unlimited business and personal use — fully deductible and no benefit-in-kind tax charge.
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The rules differ by trading structure. Sole trader / partner: HMRC expects you to apportion the bill — for example 70% business, 30% personal — and claim only the business slice against trading profits. Keep itemised bills or a usage log for the first month each year to justify the split. The handset is a capital purchase eligible for the Annual Investment Allowance (£1,000,000 cap). Limited company director or employee: section 319 ITEPA 2003 lets the employer provide one mobile phone per employee, contract in the company name, paid by the company, with no taxable benefit-in-kind even when used 100% personally. Two mobile phones, or a contract in the employee's personal name reimbursed by the company, both fall outside the exemption and are taxable. SIM-only contracts qualify; broadband, smart watches and tablets do not. VAT-registered businesses on standard accounting can reclaim VAT on the business proportion. Worked example: £40/month phone bill on a sole-trader 60% business split = £288 of allowable expenses per year, saving (depending on marginal rate) £58-£115 of Income Tax plus NI. A company-provided iPhone Pro on a £60/month plan saves £720/year of post-tax personal expenditure.
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This answer is informational only and does not constitute financial, tax or legal advice. Figures are for the 2025/26 UK tax year. See our methodology and sources.