Claiming Phone and Internet Expenses

Introduction

Phone and internet costs are essential for most businesses. As a sole trader, you can claim these expenses, but you need to apportion between business and personal use if the same connection serves both.

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What You Can Claim

Mobile Phone

• Contract costs (business portion)
• Pay-as-you-go top-ups (business calls)
• Business-only mobile line (100%)
• Handset costs (as capital allowance if significant)

Landline

• Line rental (business portion)
• Business calls (100% of actual business calls)
• Separate business line (100%)

Broadband

• Monthly subscription (business portion)
• Installation costs (business portion)
• Equipment costs (router if business essential)

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Apportionment Methods

Percentage Basis

Estimate the business use percentage:

Example:

• Monthly broadband: £40
• Estimated business use: 60%
• Monthly claim: £40 × 60% = £24
• Annual claim: £288

Actual Usage

For phone calls, you can claim actual business calls:

Example:

• Review itemised bill
• Highlight business calls
• Claim those specific costs

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100% Business Lines

If you have a separate line solely for business:

• Claim 100% of costs
• No apportionment needed
• Cleaner record keeping

When This Makes Sense

• High volume of business calls
• Need to separate business/personal
• Professional image (dedicated business number)

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Record Keeping

What to Keep

• Monthly bills and invoices
• Record of apportionment method
• Itemised bills (if claiming actual calls)
• Evidence of business use percentage

How Long

Keep records for at least 5 years.

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Common Mistakes

1. Claiming 100% personal phone - Must apportion if mixed use
2. No calculation basis - Document your apportionment method
3. Changing methods randomly - Be consistent year to year
4. Missing itemised records - Keep all bills

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FAQs

Can I claim a new phone?

Yes, as capital allowance or expense depending on cost. Apportion for personal use.

What about apps and subscriptions?

Business apps (accounting, productivity) are deductible. Personal apps are not.

Should I get a separate business phone?

Recommended if you have significant business calls. Simplifies record keeping and claims.

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Conclusion

Phone and internet expenses are legitimate business costs. The key is honest apportionment between business and personal use. Consider separate business lines if your usage is high enough to justify the cost.