I have had a number of start up companies who due to having no credit rating, have had to get mobile telephone contracts in individual names. Most of them are insistent that the phones are used 100% for business purposes.
As I understand it, as this cannot be proved, the whole bill is taxable and subject to NI, unless there are any indentifiable calls above the monthly allowance which are business.
This seems harsh. I am considering telling them that when the contract is renewed they should then transfer them to company names (i.e when they have credit), and if they fail to do they then should be subject to tax and NI
I know this is not technically correct but it appears to be fairer! Does anyone else go down this route or do they report them regardless?
Thanks in advance