Business mobile contract or Personal?

LordLee

Hi all. I've just started up my own company and am gradually getting to grips with all the perks and pitfalls of running a business.

I have a good accountant who advised me to use the company to pay for my mobile contract. (To be fair business does make up about 80% of its usage.)

But do i go for an O2 or EE business contract or personal contract? The only real advantage i can see is shorter contracts. 12 months or so. I noticed O2 lease. Looked into it but am concerned about the chances of being penalised for returning a phone not in great shape.

Anyone have experience of this and can put the pros and cons in layman's terms?

Cheers.

mobilejunkie

I have been self-employed since 1982 running my own business and currently have 9 contracts. I am registered for VAT and have never used an accountant as I'm sufficiently qualifed not to need one. If it is a Limited company and VAT registered one advantage to you would be claiming the VAT back. You could also do that if it isn't but you are VAT registered. The same applies for the cost after VAT if it's solely for business use (or you can allocate a percentage according to what the phone is used for, as you can with other expenses which are split between business and private use). I'm not sure business contracts are better value and your consumer rights may be less. It may depend on how the business is set up and how the mobile cost can be offset - why not ask the accountant the simple question of why?

LordLee

Thanks. I should've mentioned I am VAT registered (voluntarily on the flat rate scheme) and it is a Ltd company . Obviously I can only claim business calls and not the line rental/monthly fee if I don't put the contract through the business. So as I'm out of mobile contract I can but a new contract through the company.

It's just a case of a network supplier's personal or business contracts. I just don't see much of a difference.

mobilejunkie

You can claim a proportion of the line rental if you pay tax as self-employed. Or you could claim it back as an expense from the company if you are classed as its employee. However, the VAT registration must either be you or the company. If it's a personal contract and you claim the proportion from the company as its employee then the company wouldn't be able to claim any of the VAT back. If it's you who are registered it's different.

LordLee

The VAT registration is to the company. So I'm right in thinking I need to get a business contract?

Or can I just buy a personal normal phone contract and register it to the company?

Heh heh... v confusing (for me).

mobilejunkie

In that case I suspect it would be better to get a business contract - it may then depend on whether that's a lot dearer than a personal contract. It may also give you a get out of the contract should the company ever (God forbid!) go into liquidation. Most businesses fail in the first two years.