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Mobile phone for Director but not used business

Excessive use of mobiles phone

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Business has small rental income from one unit and investment income.

Only expense is the mobile phone which costs  about £200 per month.

Is this still allowable as Directors allowed phone but there is the totally

and exclusive rule.  So cant work out if its an allowable expense or not.

Any help?

 

Replies (10)

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By David Ex
20th Aug 2021 11:37

janitia wrote:

there is the totally and exclusive rule.  

Not familiar with that one.

Tell me, is the “business” a company?

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Replying to David Ex:
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By pauld
20th Aug 2021 12:31

I guess 'director' may give it away.

I would be intrigued how anyone runs up a bill of 200/month. Is the contract in company's name?

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Replying to pauld:
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By David Ex
20th Aug 2021 12:38

pauld wrote:

I guess 'director' may give it away.

True but Any Answers is full of surprises!!

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Replying to pauld:
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By David Ex
20th Aug 2021 12:48

pauld wrote:

I would be intrigued how anyone runs up a bill of 200/month.

You can get a mobile phone contract with unlimited everything for about £30pm so my guess would be overseas calls which doesn’t sound like business use assuming that the business is in the UK.

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Replying to David Ex:
By Duggimon
20th Aug 2021 14:10

David Ex wrote:

pauld wrote:

I would be intrigued how anyone runs up a bill of 200/month.

You can get a mobile phone contract with unlimited everything for about £30pm so my guess would be overseas calls which doesn’t sound like business use assuming that the business is in the UK.

512GB iPhone Pro 12 Max available today on EE with unlimited data for £109 per month, so you're a bit on the low side, but I agree £200 per month means they're paying for something outwith the normal package.

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Replying to Duggimon:
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By David Ex
20th Aug 2021 16:33

Duggimon wrote:

512GB iPhone Pro 12 Max available today on EE with unlimited data for £109 per month, so you're a bit on the low side, but I agree £200 per month means they're paying for something outwith the normal package.

That’s true. I was thinking of SIM only.

Presumably charges over and above the inclusive minutes, etc., will be itemised and so could be subject to disallowance assuming they are not business related.

Or does the fact that the cost is in providing a benefit that happens to be not chargeable mean that no disallowance is required?

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By SXGuy
20th Aug 2021 12:29

Phone contract in company name?

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By Paul Crowley
20th Aug 2021 12:53

Agree all
If it is a company and the contract is in company name and company pays it, then it is possible it is a tax free benefit to the employee, the diector.
That does assume that it is a mobile phone and not a Virgin media package
I have NO CLIENT paying that much for a single mobile phone
If this came to me as an HMRC person I would challenge it as clearly is out of normal expected price range.

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Replying to Paul Crowley:
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By janitia
20th Aug 2021 16:08

It is a limited company. And the cost is one reason I wanted to ask the question because directors can have a business phone paid for by the company and I cant see that HMRC put a cap on it and I cant see how it is used for business either. It is just an everyday mobile phone .

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By The Dullard
20th Aug 2021 22:36

Yes. It's an allowable expense, by way of being treated as a management expense by virtue of being director's remuneration.

There's no benefit in kind though, by virtue of ITEPA 2003, s 319, assuming that the contract is in the company name. If the contract is in the director's name then it is taxable and NICable as pay, by virtue of being a pecuniary liability.

And it is irrelevant to that analysis why the amount of the liability is £200 per month.

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