Claiming mobile phone expenses: self-employed guide & tips for employers

Understanding what you’re owed for your mobile expenses is easier than it seems. We’ll walk you through what you’re entitled to and how to claim back.

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Whether you’re using your personal mobile for work or have a company-issued smartphone, it’s likely there are expenses you can claim back.

If you take the time to crunch the numbers and follow all the necessary steps with HMRC, you’ll have reduced tax liability and an extra bit of cash in your pocket.

But the process of claiming mobile phone expenses can be quite different depending on whether you’re self-employed or an employee. The claims process can change again if you have a company-issued smartphone, or use your own device for work purposes.

Can you claim a mobile phone as a business expense?

Yes, you can claim your mobile phone as a business expense – but what you can and can’t claim will depend on your type of employment.


Yes, you can claim a portion of your phone costs as someone who is self-employed. However, you can only claim for the business-related usage. This means figuring out what percentage of your calls, texts, and data are for work purposes.

Although no set method exists, you can come up with a reasonable calculation from analysing your recent mobile phone statements and records. You can…

  • Calculate a percentage based on past statements: analyse a few months’ worth of statements to calculate your average business use percentage and apply it to future costs.
  • Have a separate business phone: get a separate phone or SIM card solely for business. You can claim tax on the handset cost if purchased outright, plus monthly contract costs.


As an employer, a small business can provide benefits including a business mobile contract, or cover certain phone expenses for its staff.

In the best case scenario, the company provides an employee with a business mobile phone or SIM card under a business contract. The business pays the bills directly, and both personal and business use may be allowed. With these criteria met, the company can claim VAT on the costs of the business usage of the phone, if they are VAT registered.

If the employee pays and the company reimburses mobile expenses, only actual business call costs can be reimbursed by the business. In these cases, the employee would need to submit itemised expense claims. The business can still claim VAT back on the business expenses it covered for the employee.

Claiming mobile expenses as an employee

  • Check the company’s policy: does your employer follow a Bring Your Own Device (BYOD) policy and offer to expense claims? Every company has different approaches, so understanding its stance is crucial.
  • Understand what’s eligible: some employers might reimburse the entire plan, while others may only cover business-related charges. Some might require expense claims through internal systems, while others allow staff to claim directly on their tax return. Consult with your HR department or finance team for clarity.
  • Transparency and documentation are allies: regardless of the process, be meticulous in tracking business-related usage. Whether it’s call logs, emails, or data consumption records, show clear evidence of work-related activity. Also, always keep receipts for any phone related purchases you make for work.
  • Heads up on potential tax implications: high-value phones might trigger benefit-in-kind taxes. The caveat is that the company can still provide its staff with a tax-free phone, as long as the phone contract is under the company’s name and only one phone or SIM card is received.

Can you claim mobile expenses if you use a phone for business and personal use?

Yes, but you can only claim the portion used strictly for business. This means separating work calls from catch-ups with friends or loved ones. To successfully claim what is owed, a strict record of all mobile activity must be kept, especially as using platforms such as WhatsApp for business is blurring the lines. Here’s how:

  • Be proportionate: calculate the percentage of the mobile phone’s use that was dedicated to business. To do this, you can track the usage by breaking down the number of business calls, texts, and data from the past few months to establish a business-to-personal ratio. You can also keep records of each business-related call, text, or data session. While this might feel tedious, it gives you a precise idea of how much can be claimed.
  • Document details: don’t just track the quantity of usage, but also the nature of the business activities. To do this, record the date, time, and duration of each business call. Note down the purpose of each one, and keep copies of important business emails or messages received on the mobile phone. This is crucial to keep in case there is an audit or inquiry from HMRC.
  • Separate is best: if possible, consider having a separate business mobile or maintain distinct usage patterns on the current mobile phone. This simplifies record-keeping and eliminates the need for calculations.

Eligible mobile expenses for self-employed

These are the mobile expenses you can claim if you’re your own boss. Remember to keep track of all your mobile phone activities for a smoother tax refund process.

  • Contract costs: you can claim the proportionate share of the monthly phone plan fee that relates to business use. If you have one plan for both work and personal calls, estimate the percentage of business calls and apply that to the monthly fee. Data charges follow the same principle.
  • Calls, texts and data: you can claim the full cost of any calls, texts, or data usage that’s directly related to your business. This includes client conversations, scheduling calls, and research-related data consumption.
  • Phone handset cost: if you use a personal phone for business, only a proportionate share of the cost can be claimed.
  • VAT (for VAT-registered businesses only): if your business is VAT-registered, you can claim back the VAT on your business-related mobile expenses. Remember to keep any invoices when claiming VAT on both the phone and the associated charges.

How and when can you submit mobile expenses to HMRC?

Here’s a breakdown of what you need to report, how, and when:

What do you have to report and how?

  • Multiple phones: if more than one phone is provided to an employee, only the first one is exempt. Others are considered benefit-in-kind and are taxable assets.
  • Employer pays supplier: when an employee arranges for the phone but the business pays the supplier, report the cost on form P11D and pay Class 1 National Insurance.
  • Reimbursing for personal calls: if an employee’s monthly phone tariff is reimbursed by the business, deduct and pay Class 1 National Insurance and PAYE tax through payroll. There’s no additional reporting required. However, if private calls that exceed the tariff are reimbursed, report the excess amount on form P11D.
  • Business call charges: report the cost of business calls exceeding the monthly tariff on form P11D. No tax or National Insurance deductions are needed here.
  • Pay as you go phones: if an employee uses a pay as you go phone and the business reimburses them for business calls, report the reimbursed amount on form P11D. No tax or National Insurance deductions are needed.

How do you calculate the value?

  • If the employer pays the supplier or reimburses the employee, the value for payroll is the reimbursed monthly tariff plus the cost of private calls (if reimbursed). The value for P11D is the cost of business calls exceeding the tariff.
  • If an employee uses a pay as you go phone, the reimbursement amount must be used as the value for both payroll and P11D.
Don't miss the deadline!

Forms P11D for the 2023-24 tax year must be submitted electronically by July 6, 2024. You can choose to do it yourself or rely on a payroll service provider to submit it through accounting software or HMRC’s PAYE online service.

Methods for recording business use of your phone

Here are some effective methods to track your business phone usage and stay prepared for potential HMRC audits:

  1. Bills and receipts → whether you prefer digital versions stored securely in the cloud or neatly organised physical copies, keep every phone bill and receipt. These act as a primary proof of phone-related expenses.
  2. Call logs and usage logs → go beyond simply noting down business calls. Record details like date, time, duration, and the subject of the call. Usage logs that break down business data consumption are also valuable.
  3. Spreadsheets and accounting software → be organised. Use software designed for expense tracking, allowing you to categorise costs, attach receipts, and calculate totals.
  4. Use specialist apps → utilise mobile apps or accounting software that is designed for expense tracking and receipt management. These can automate the process, saving you time and ensuring accuracy.
  5. Retention period → HMRC generally expects you to keep records for at least six years after the relevant tax year. Play it safe and consider keeping them even longer, especially when it comes to larger expenses or potential audits.

Final tips and considerations

Mobile phone expenses are a perfectly legitimate tax claim for the self-employed. You can also claim back the VAT on the cost of the handset and the monthly contract costs if you run a small business that has issued mobile phones to staff..

However, it’s crucial to be clear with HMRC about whether a device has mixed personal and business use, and you can only claim accordingly. Above all, honesty is the best policy. Accurate records and open communication with your employer prevent unnecessary complications.

If your situation is complex or involves high-value claims, reach out to a tax advisor. Their expertise can walk you through the steps you need to follow to ensure you’re maximising your eligible deductions while staying compliant.

Stay informed, too. As with any tax-related matters, regulations can change. Stay updated on HMRC’s latest guidelines to avoid any surprises come tax season.

Written by:
Fernanda is a Mexican-born Startups Writer. Specialising in the Marketing & Finding Customers pillar, she’s always on the lookout for how startups can leverage tools, software, and insights to help solidify their brand, retain clients, and find new areas for growth. Having grown up in Mexico City and Abu Dhabi, Fernanda is passionate about how businesses can adapt to new challenges in different economic environments to grow and find creative ways to engage with new and existing customers. With a background in journalism, politics, and international relations, Fernanda has written for a multitude of online magazines about topics ranging from Latin American politics to how businesses can retain staff during a recession. She is currently strengthening her journalistic muscle by studying for a part-time multimedia journalism degree from the National Council of Training for Journalists (NCTJ).

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