Paying for mobile phone from personal bank account rather than company bank account

Paying for mobile phone from personal bank...

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I operate as a limited company (one man band), but my mobile phone, which I use mainly for business, is being paid out of my personal bank account.

Should I just credit these payments to my DLA, or should I alter the direct debit to come out of the company bank account?

Replies (6)

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By Tim Vane
05th Nov 2015 09:36

Who is the contract with? If it's a personal contract then what makes you think it has anything to do with the company?

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Replying to DJKL:
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By WestBest
05th Nov 2015 11:09

The contract is in my name but has business use

Tim Vane wrote:

Who is the contract with? If it's a personal contract then what makes you think it has anything to do with the company?

OK thanks - The phone is in my name, but has 90% business use. So would I claim it on my tax return (as a business related expense on the employment pages) or would I deal with it in the company accounts as a Debit to "Mobile expense" and a Credit to "DLA" (with the actual business usage).

 

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By Tim Vane
05th Nov 2015 12:14

The phone expenses that you could put on your employment page would be limited to the out-of-tarrif cost of business calls, not the line rental or calls included in your tarrif. You would be advised to keep a record of all calls for which you were claiming, such as an itemised bill..

If the company reimburses you personally for the full monthly contract cost then you have BIK and NIC issues.

Going forward, the simplest way of paying the actual cost of the phone is for the company to pay the bills. Can you switch your contract so that the company pays directly?

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Replying to Paul Crowley:
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By WestBest
05th Nov 2015 16:53

BIK ?

redman7 wrote:

or as a work around see below....

https://www.accountingweb.co.uk/anyanswers/question/personal-mobile-phone-contract-agreement-between-director-and-company

 

 

 

Creating a contract with the limited company for use of the phone (similar to renting an office at home agreement) seems a good idea to work round the problem, however, would this not create a BIK charge?

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By redman7
07th Nov 2015 08:04

re

I hope not - but stand to be corrected!

It would be an agreement between the company and a mobile phone provider, it's just that the director happens to be the mobile phone provider.

I would think as long as it's documented properly it covers off any issues, but I would love to hear other people's thoughts on this.

 

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