To claim full relief on your mobile phone or telephone you will need to ensure that a contract is set up between your company and the service provider, this way you can gain full tax relief on the cost of the phone and its use - any personal calls on the mobile are treated as a tax free benefit in kind, so are a consequence of an allowable business expense and will encounter no tax - or need reporting on your P11D.
If you take out a phone contract in the name of your business you will also receive Corporation Tax relief on the entire cost of your phone bill, so if the entire balance of a mobile and its contract is £1,000, this would be recorded as an expense, knocking £190 off your Corporation Tax bill. The personal use included in the bill would be classed as a tax-free benefit in kind, so you will not be taxed on it.
The one caveat with signing a phone contract in the name of your company is that you’ll probably have to use one of your phone provider’s business tariffs, which may prove slightly more expensive – but any increase in cost will probably be wiped out by tax savings.
We do not recommend claiming for business use on a personal contract as no percentage of the tariff can be claimed on the basis of paying for minutes because these minutes are "free" and therefore have no cost.
How do I record this in Crunch?
We only recommend having a business contract so that you are able to claim 100% of the costs. Please make sure that the contract states your company name.
To enter an expense under your company name, do as you would with any other expense and add the full cost of the bill including rental into Crunch when you receive a bill. Add the phone provider as a supplier and create an expense under the expense type 'General Administrative Expenses > Telephone'
How do I claim for the cost of the mobile phone itself?
If you are looking to claim the purchase of the actual mobile phone item or any other telephone equipment (in the company name), please record it as 'Fixed Assets > Equipment Cost'.