UK tax implications of using a personal mobile phone for business purposes

In today's digital age, it's common for individuals and small business owners to use their personal smartphones for business purposes. Whether it's making important client calls, responding to emails on the go, or managing social media accounts, our phones have become indispensable tools for work. The good news is that the UK's tax system allows for potential tax deductions on the portion of expenses related to business use of personal items, such as smartphones. However, claiming these deductions comes with certain responsibilities, including accurate record-keeping and adhering to HM Revenue and Customs (HMRC) guidelines.

Key points to consider:

1. Apportionment:

You need to determine a reasonable and fair way to apportion the expenses. For example, if you use your phone 30% for business and 70% for personal use, you can claim 30% of the expenses.

HM Revenue and Customs (HMRC) does not prescribe a specific method for calculating the apportionment of expenses when using personal items, like a phone, for both business and personal purposes. However, they do require that the method used is fair and reasonable, based on your actual usage.

Here are some common methods that individuals and businesses may use to calculate apportionment:

1. Call and Data Logs:

Keep detailed records of your phone calls, text messages, and data usage. Then, based on the percentage of business-related calls and data usage, you can calculate the business use portion.

2. Time-based:

If you use your phone for specific business tasks, like responding to emails or taking business calls, you could estimate the time spent on these activities and calculate the percentage of business use over the total usage.

3. App-based:

If you use specific apps predominantly for business purposes, you could calculate the proportion of business-related app usage.

4. Number of Contacts:

If you maintain separate contact lists for personal and business purposes, you could count the number of contacts in each category and determine the proportion of business use.

5. Data Usage:

If your phone plan provides separate data allowances for personal and business use, you can use these allowances as a basis for apportionment.

2. Record-keeping

Regardless of the apportionment method used, it's essential to maintain accurate records of your phone usage and expenses and be able to demonstrate to HMRC that your apportionment is fair and based on a reasonable estimation of business use. This may include keeping detailed call logs, text message records, and data usage for business-related activities.

3. Specific business use

The portion you claim must be solely for business purposes. If any part of the usage is personal, you cannot claim it as a tax-deductible expense.

4. Business ownership

If you are a sole trader or self-employed, you may claim the expenses on your self-assessment tax return. If you are a limited company director, the company could potentially reimburse you for the business use of your phone, but the company would claim the expenses, not you personally.

5. Reasonableness

HM Revenue and Customs (HMRC) requires that any expense claimed is reasonable for the level of business activity you are conducting. In the event of a tax investigation, you may be required to provide evidence of this to HMRC.


Remember that tax laws and guidelines may change over time, so it's crucial to check with HMRC or consult a qualified accountant for the most up-to-date information and to ensure compliance with current regulations.

Need help figuring out what your tax liability might be? At Beancrunch, our team of Chartered Accountants specialise in providing accountancy and tax support to individuals and small businesses. Get in touch to find out how we can help you:

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