Can I claim my Mobile Phone as a Business Expense?
- Jerelyn Aglibao
- Oct 10
- 4 min read
Updated: Nov 4
The short answer is: yes, you may be able to claim some (or all) of your mobile phone costs as a business expense — but it depends on how the phone is used, how the contract is held, and whether you're a sole trader, partner or limited company. You must also follow HMRC’s “wholly and exclusively” principle and proper record-keeping.
Let's break down the rules below.
HMRC’s stance on mobile phone expenses
The UK government provides guidance under “Expenses and benefits: mobile phones”. It explains what must be reported, and the tax and National Insurance implications.
Some key points from HMRC:
If your business provides mobile phones to employees, you may have to report costs and pay tax if the phone is not exempt.
HMRC allows a tax exemption for one mobile phone per employee or director — so long as the contract is between the employer (or company) and the provider, and there’s no excessive personal benefit.
If you reimburse an employee for their own mobile phone costs, the reimbursement may require tax/National Insurance deductions unless strictly for business use, and you may need to report using form P11D.
But HMRC’s guidance is more about employers and benefits; for self-employed individuals, you must also follow the rules on allowable expenses (see next section).
Self-employed / sole traders: what you can claim
If you're self-employed (sole trader or in a partnership), you can claim mobile phone costs as allowable business expenses — but only the portion that relates to business use. HMRC makes clear that where something is used for both business and personal purposes, you must apportion the cost reasonably.
Here’s how it works in practice:
Suppose over a tax year your phone bills total £200, and you can reasonably show that £70 of that is attributable to business calls, data or usage. You can claim £70 as an allowable expense.
You don’t need to show a perfect, per-call calculation, but your apportionment must be reasonable and justifiable (e.g. by sampling a month’s use).
If you had a separate phone used only for business, you could potentially claim 100% of its costs.
If you are VAT registered, you may also reclaim the VAT proportion corresponding to your business use (unless you're under a flat rate VAT scheme).
Important: you must retain detailed records (phone bills, usage logs, invoices) in case HMRC asks for evidence.
Limited Companies / Directors / Employees
If your business is a limited company or you employ staff, the rules differ slightly because of benefits in kind (BIK) and reporting requirements.
Providing a business mobile via the company
If the company takes the mobile contract in its name (i.e. the company is the contracting party with the supplier) and pays for it directly, then:
The company can treat the cost of the handset, call costs, and contract charges as allowable expenses against corporation tax.
Under the tax rules, one mobile phone per employee or director is exempt from being treated as a benefit in kind, even if there is some personal use (provided the personal use is reasonable).
If more than one phone or SIM is provided to the same employee, the extras may be taxable as a benefit in kind.
When the contract is in a personal name or reimbursed
If the employee or director holds the contract in their personal name and the company pays it or reimburses it:
The reimbursements or payments may need to be reported as a benefit in kind or via payroll (Class 1 National Insurance), depending on the circumstances.
The company can only claim the extra or business-specific costs (e.g. extra minutes beyond the standard allowance) — not the basic line rental — because of the dual use.
So, having the contract in the company name is usually the cleaner, safer route.
Practical tips & best practices
Use a business contract: If possible, have the mobile phone contract registered in the business name (or company’s name). This simplifies claiming the full cost and avoids many benefit-in-kind complications.
One phone per employee: The tax exemption for mobile phones allows one per employee/director — avoid giving multiple devices to the same person unless you intend to treat extras as taxable benefits.
Apportion wisely: If using one phone for both business and personal, keep a usage log or analyse a few months’ bills to determine a reasonable business percentage.
Keep good records: Retain bills, invoices, itemised breakdowns, and usage logs. If HMRC queries your claims, you must substantiate them.
Avoid “excessive” personal use: Even when personal use is allowed, it should be reasonable and not dominate the usage.
VAT treatment: If you’re VAT registered, ensure you only reclaim VAT corresponding to business use (unless other rules apply).
Seek professional advice when unsure: Especially for limited companies or mixed-use cases, it’s wise to consult an accountant to ensure you stay compliant.
Conclusion
Yes — you can often claim your mobile phone (or part of it) as a business expense in the UK — but success hinges on how you structure the contract, how you apportion business vs. personal use, and whether your business is a sole trader or a limited company. Always ensure your claims are defensible and backed by evidence, as HMRC expects “reasonable and justifiable” apportionment.
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