Mobile phone costs for self employed

anthonyvivaldi

I know there are several threads on mobile phone costs but I can't find anything that answers my couple of questions.
If I have a mobile phone which I use for my business (self employed sole trader) and I have a contract which includes xx minutes and xx texts, how do I work out the proportion I can claim for business use?

If, during the year, I make 60% calls for business and 40% calls non-business, it would be safe to assume that I could claim 60% of the costs as expenses.

1) In terms of time though, that could be lots of short calls for business and fewer longer calls for personal use which means that although it is a 60:40 ratio for calls connected, it could be a 20:80 ratio in terms of minutes used.
Which method would be safest or fairest to claim? Ratio of calls made or ratio of time used?

2) If it's taken as calls made rather than time used, what about calls that connect but aren't answered (ie. go to answerphone)?
If I make 200 business calls and 200 non-business calls (for example), then you'd assume 50% business use.
But what if out of those 200 non-business calls, 199 of them went to answerphone to which I hung up and tried again later?
It would be unfair to class those as actual calls because I only wanted to speak to the person once but had to call 200 times in order to do so.
Could I fairly discount calls under 5 seconds from my calculations?

And then we have texts...
3) Whilst I could collate the data to show number of texts to each number over the year, it would be unrealistic to detect exactly which of those texts (among the several hundred sent during the period) would be business or not. It would take hours and hours to go through them, so how do I fairly split the text usage given that not all texts to business numbers are necessarily to do with business and not all texts to non-business contacts are necessarily just personal.
For example, my brother sometimes books me to do work for him and those texts relating to that would be business use, but we also text about my father's health or birthday presents.
Can you suggest a fair (from the taxman's point of view) way of assessing usage that wouldn't take many, many hours?


Thanks for any insights into this!

01afraser4

In terms of phone bills, HMRC generally won't be picky about this type of thing unless the costs appear really excessive.

As you have pointed out above, it is sometimes tricky to definitively say what the split is between business and private use so it doesn't need to be an exact science. As long as you use a reasonable, educated estimate that isn't taking the mick, then it should be fine.

Pennywise

You don't say whether you're a sole trader or a limited company. Treatment of mobile phones and tax relief varies dependent on which.

anthonyvivaldi

Sorry, I'm self employed sole trader. OP updated with this info.

Pennywise

anthonyvivaldi wrote: »

Sorry, I'm self employed sole trader. OP updated with this info.

Then as 01afraser4 states, it's just up to you to make a reasonable judgement call about what to claim against the business. HMRC aren't going to be too picky. You just need to be able to justify your decision should HMRC ever ask you. In my experience of 35 years as an accountant, HMRC only ever challenge the people who look to be taking the mickey either by unrealistic high claims of business proportion use or unusually high total costs. If the total cost is, say £25 per month, and you claim, say 50% of that, they'll almost certainly not enquire into it. However if your monthly cost is £75 and/or you claim 95%, then you'd better have good business justification to counter them if they challenge it. Of course, you may have good business justification and if so, then HMRC will probably accept that if your argument holds water. They're certainly not going to waste their time arguing it should be 40% if you've claimed 50%!

anthonyvivaldi

Thanks 01afraser4 and Pennywise for your quick and helpful responses