Expensing an iPhone to Ltd Co.

Hospitals and schools now built by unscrupulous developers in return for 000s of low quality rabbit hutch houses built destroying swathes of countryside.

Mr_awol wrote:

Go get a proper job and pay your taxes like most people do.

Don’t worry. When folk like this DIY they will always end up paying more tax than they should. Save a penny in fees spend a pound in taxes.

garethprobert wrote:

You keep telling yourself that...

LOL. There is a very good reason that HMRC encourage businesses to DIY. It’s good news for the exchequer. No skin off my nose; somebody needs to pay for all those nurses and teachers.

Mr_awol wrote:

‘Expensing’

You’re a ‘contractor’ aren’t you?

Go get a proper job and pay your taxes like most people do. Hospitals and schools don’t build themselves, and Mrs May is bound to need some more bribe money to keep her job soon.....

Overly harsh. Get out of the wrong side of bed this morning?

atleastisoundknowledgable... wrote:

Overly harsh. Get out of the wrong side of bed this morning?

Harsh but fair I'd say - based on the balance of probability.

It was 00.08 - I hadn't made it to bed at that stage, but was in an average mood really. Not bouncing off the walls but not overly grumpy either.

@AWOL - that’s you told.

OK well either try a different bank or do what you suggest provided the invoice is in the name of the company, assuming it has already been set up.

As soon as the phone provider sees a whiff of it being a business rather than personal phone, the offer may well vanish..

depends on whether there's a contract attached - if just the handset then no issue but def would be diff if going into a business contract for a Ltd only just set up

Also you'd have to show the phone is being used exclusively for business not personal ref 'Duality of purpose'

it's not a BiK - you are buying a phone for business use which you want to expense back to the company.

If that phone is exclusively for business it is allowable expense. If the phone is also for personal you cannot claim it as business expense.

Do not confuse call charges that can be specifically separated out to business/personal with the hardware that is bought independently of the call contract.

If you entered into a contract where you can show specifically the business use separately from personal use. But often phone contracts have unlimited calls or texts so unless you show exclusive and wholly for business, you may not claim it as a business expense.

I think that you have completely misunderstood the question. As I read it:

Company wants to buy a phone to provide to its director, but does not yet have the funds to do so.

Director pays for the phone on behalf of the company and re-charges the cost to the company.

I don't see any major issues with that.

Either way, you're good to go as you propose in your original question.

I have understood the question if you bother to read back over the posts. I answered the most recent part of the discussion.

And there are no major issues in theory but only if the handset is not used for personal calls. If it is then there are implications for both the recoverable vat % and whether there is duality of use.

If the handset meets the conditions of section 319 duality of purpose simply doesn’t come into it.

In fact, even if the conditions were not met you’d simply have a taxable benefit in kind. Again, duality of purpose is irrelevant.

As far as VAT is concerned, there should be no restriction on recovery of VAT on the handset even if there is some private use, provided that there is some business use.

C Graham wrote:

I have not understood the question

You need to explain your post at 13:52. None of it makes sense in the context of the questioner's position.

https://www.gov.uk/expenses-and-benefits-mobile-phones/whats-exempt

What's exempt
You don’t have to report anything to HM Revenue and Customs (HMRC) or deduct and pay tax and National Insurance if both the following apply:

you provide your employee with only one mobile phone or SIM card

the phone contract is between you and the supplier

https://www.ross-brooke.co.uk/mobile-phone-tax-trap/

I'm not sure what your point is. None of that would appear to apply in this case.

poster wrote
(I) "will address this separately when my current (personal) one is up soon."

Which simply says to me that he intends to enter into a contract between company and service provider when his current contract expires - that has no impact on the exemption for the handset.

Gareth
I looked back at your previous post and was shocked to read the comments some made, as well as a few that have been made on here. It was totally undeserved but no one here has bothered to highlight their appalling behaviour – so I will. I do not like to see bullies targeting others online.

This forum presumably is not moderated and the behaviour of what should be described as professional adults is more like the stuff of school playgrounds. These adults should be ashamed that the best they can do is make vitriolic, snide remarks for eachother’s entertainment. And don’t bother even providing an answer in the process.

There’s a regular few names who troll this site and either:
1/Simple question – slam you for not knowing the answer
2/Complex, more specialist question – slam you for trying to ‘freeload’ and not pay for professional advice.
And a few in between who give very good, and correct advice. But it is not a friendly forum and there’s rarely any eloquence to the replies.

Obviously you are a start-up still in your early days of building your company and when you are establishing a new business for the first time you have to be resourceful. Money is tight. And you have to learn as you go and ask questions. Looks like you are doing both and your question was perfectly understandable.

Sometimes the HMRC rules are complex and a small operational detail can cost in recoverable tax or NI. Let’s face it, if HMRC made things simple, they’d never be in court challenging companies for exploiting loopholes or re-interpreting the rules which they believe were wrong. And they’ve lost many cases. So opinion will vary which will be based both on experience, interpretation and studied knowledge. I tend to view things with caution but am always happy to be corrected because it’s good to know what others think.

Often a question will give rise to other angles of a subject which is why I moved onto the call contract you will eventually set up. Yet as you see, I get slammed for evolving the discussion. I had already answered your original question as had a few others but the obstreperous comments lower down ask why a simple question didn't get a simple answer. Well it did if they bother to read the chain of posts!

I would never waste time replying to those comments which attack the poster simply for asking a question. Extract from here what you need and ignore the arrogance of the cynical time wasters who seem to have nothing better to do than sit and pen insults. I get an idea about the profile of these trolls from the language/words they use and they are definitely not young entrepreneurs.

I am sure you will be successful and not fazed by coming here and asking for advice. There are several workshops for new business owners or those setting up; some e-learning which can be handy. Otherwise I hope when you are enjoying the success of your business and making decisions about which accounting firm to use, you don’t employ any of those who could not be bothered to help you when you needed it.

I was in a similar position once and the first 2 years are incredibly hard. When I sat behind the wheel of my dream car, I considered it was all worth the risk, long hours and sleepless nights.

Wishing you success for your venture.

Much of the irritated responses are because this forum is for accounting professionals, as indicated in the terms and conditions agreed to by everyone who has got far enough to write a post.

Sift have forums specifically designed for people in the position of the OP, they're at https://www.ukbusinessforums.co.uk/

Perhaps if people would read the short and simple rules before posting here there'd be less people on here telling them to **** off.

You can say what you like but your advice would have cost Gareth money so you can schmooze him all you like, he should not engage you for services.

My advice as given at 11.27 to the original question was that he could expense the handset as he asked.
And haha - I sure as hell am not here touting for business. You know nothing about me at all so do not assume to predict I have any motive other than occasional subject interest.

Is that why you are here - sniffing for opportunity - no?- well don't make suggestions that are unsubstantiated.

I do object generally to the offensive tone of many replies and attacks on posters. But your view is typical of the cynical response I'd expect.

C Graham wrote:

My advice as given at 11.27 to the original question was that he could expense the handset as he asked.

"Also you'd have to show the phone is being used exclusively for business not personal ref 'Duality of purpose'"

That is where the discussion started to spiral out of control. Your comment might have been referring to something other than the handset, but there was nothing to indicate that was the case.

https://www.gov.uk/expenses-and-benefits-mobile-phones/work-out-the-value

'The value to use for reporting or paying National Insurance depends on who arranges and pays for the mobile phone, and whether you cover the cost of personal or business calls.'

What's exempt
You don’t have to report anything to HM Revenue and Customs (HMRC) or deduct and pay tax and National Insurance if both the following apply:

a you provide your employee with only one mobile phone or SIM card
b the phone contract is between you and the supplier

In the additional conversation he mentioned that the call contract is currently in a personal name so B would not apply. And yes he intends to move it once able to.

You missed the point again. The question, which you answered, related purely to the handset.

We now know that you moved the conversation onto the contract but at the time there was nothing whatsoever to indicate that. Which is why your reference to duality of purpose appeared to be odd/incorrect in the context of your previous comment.

If you’re not going to make clear the subject of your comments you can’t really complain when you’re pulled up about it.

I am not sniffing for opportunity. I find this community very helpful, particularly when I was starting it out, less so in recent years. I would not want many of the posters as clients but if they get me on a good day then I will provide free advice, I was about the only person on this thread to do so as Gareth seemed to be on top if it all and gracious.