Can mobile phone costs be included in rent of home office
New client (director/employee of business) has recently taken out a mobile phone contract, intending to use this primarily for business purposes. I explained that such a contract, reimbursed to the employee by the business, counts as earnings and is subject to PAYE and NI as part of monthly payroll.
The corporation tax saving on the personal mobile costs is outweighed by the PAYE/NI paid on the reimbursed cost, so the most tax efficient option is for the employee to simply not claim his mobile phone expenses (it's a bundled tariff with inclusive minutes, so business calls will not be separately itemised).
We intend to set up a rental agreement for use of home as office, and client asks if the mobile phone can be an expense of the home office, along with mortgage interest, insurance, electricity etc. I am not sure - does anyone know if this is allowed? I've often seen landlines included in a home rental agreement, but not mobile phones.
Obviously I have also advised that the client could look for a contract in the name of the business, but good value deals are hard to come by so this is unlikely to be an option.