Mobile phone
Last checked 16 June 2026 · HMRC source
Mobile phone costs can be claimed for business use, but the treatment is very different depending on whose name the contract is in.
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Conditions
- Sole traders claim the business proportion of a personal phone bill.
- A limited company can provide one mobile phone per director or employee under a company contract, which can be free of a benefit-in-kind charge if the contract is in the company's name.
- If the phone contract is in the employee's or director's name but the company pays the supplier directly, the cost must be reported on form P11D and Class 1 National Insurance is payable through payroll.
- If the employee or director pays their own phone bill and the company reimburses them, it is not reported on P11D, but Class 1 National Insurance and PAYE tax may still be due through payroll — depending on whether the reimbursement covers the monthly tariff and private calls (taxable) or only business calls (not taxable).
- Salary sacrifice arrangements involving a mobile phone always require reporting, even if the phone would otherwise qualify for the single-phone exemption.
Common mistakes
- A company reimbursing a personal phone contract and not realising it can be a taxable benefit.
- Sole traders claiming 100% of a phone that is also used personally.
What to keep
- Phone bills and a reasonable basis for the business proportion.
- Evidence of whose name the contract is in.
Real-world example
A director arranges a mobile contract in the company's name and uses it for business. Provided it is the company contract and limited to one phone, it can usually be provided without a benefit-in-kind charge.
Frequently asked
Not a straight yes or no for everyone
On this page, the answer for a sole trader is “Partially allowable” and for a limited company is “It depends”. Working out where your own situation lands against the conditions above is the kind of thing an accountant can check for you.
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Related allowances
Source: HMRC guidance