Claiming phone, mobile and broadband expenses via your limited company

While working as a contractor, you may run up a number of business-related phone and broadband expenses. How do you ensure these expenses remain tax-deductible for your company and free of additional personal tax charges at year-end?

Phone, mobile and broadband expenses – the golden rules

Two golden rules govern the tax treatment of broadband and telephone expenses, as they do for business expenses in general.

• Firstly, any business expenses must be wholly and exclusively incurred in the course of your trade, and
• Secondly, where there is a dual purpose, i.e., you would have incurred the cost personally regardless of any business use. You will pay extra tax if you charge these expenses to your business.

Ultimately, the simplest and most tax-efficient way to claim phone and broadband costs is to ensure that the contracts are in your limited company’s name.

This guide is primarily for limited company owners. If you’re an umbrella contractor, ask your scheme provider how telephony expenses are treated, as policies vary between PAYE schemes.

Landline and Mobile Phone Expenses

• The cost of phone contract payments, both landline and mobile, can usually be offset against your limited company’s Corporation Tax bill, as long as the contract is in the company’s name. HMRC permits personal use of a company-provided phone without a benefit-in-kind charge.
• HMRC specifically allows for the provision of one mobile phone per director or employee without any benefit-in-kind (BiK) implications. See EIM20006 for clarification. The phone itself remains the company’s asset.
• If your phone contract is in your own (individual) name, and your company pays the bills, then both the company and you (personally) will be taxed on the benefit. The company pays Class 1 National Insurance Contributions on the value of the benefit (currently 15% in 2025/26). The individual will also incur a BiK (Benefit in Kind) charge on the value of the benefit.
• In theory, if you’re able to do so, you can claim the cost of any business-only calls made from a residential phone or mobile, including the VAT element. However, you can’t claim any line rental or similar charges, as there is a duality of purpose; you would have incurred these costs regardless.
• These days, with most landline and mobile contracts offering bundled or unlimited calling, contractors are less likely to recover the cost of individual calls.
• If you’re unable to split out the cost of business usage from a personal phone bill, there is no point in making a claim.

SIM-only contracts are treated in the same way as standard mobile phone contracts. If the SIM is in the company’s name and provided to a director or employee, it is not treated as a benefit in kind.

See HMRC EIM32945 and EIM32940 (below) for further details.

What about Smart devices?

The ubiquity of smart devices today has thrown up further questions about what you can and can’t offset against your company’s Corporation Tax bill.

In general, common sense applies. If your smartphone contract is in the company’s name, then this is typically an allowable business expense. Claims for other smart devices, such as watches, are much harder to justify.

You can read our dedicated guide to smart device expenses here. Also, read HMRC’s smartphone rules here.

Broadband Expenses

• If you set up a new broadband contract at home (or in your office) in your limited company’s name, this is an allowable business expense and is not subject to a BIK charge. HMRC accepts that there may be some personal use.
• If you start working from home using your residential broadband, you cannot claim if the broadband was already in place beforehand, unless you can clearly separate the business from the personal element.
• If you have no home broadband contract and need internet access to carry out your trade, the costs can be reclaimed by your company, and no BIK charge arises.

Using a company-provided mobile phone as a hotspot or for tethering does not change the tax treatment, provided the mobile contract itself is in the company’s name.

See HMRC EIM01475 (below) for further details.

Further Resources

For technical data on the tax treatment of mobile, phone, and broadband expenses, refer to the following HMRC manuals:

• EIM32945 – Mobile phone charges.
• EIM32940 – Telephone charges. Why line rental can’t be reclaimed on a phone used for both business and personal use.
• EIM01475 – Broadband expenses, reclaiming the cost of home broadband.