Home Telephone & Broadband Bills

I run a small limited company working from my home address and arrange for the company to pay my home telephone and broadband costs. Are there any tax issues that should concern me?

1st August 2010

The costs will be deductible against the company profits, but the personal tax position for both items will depend on whether the bill is issued in the name of the company or in your own name and will lead to an Income Tax and National Insurance (NIC) liability for you, based on the full costs incurred.

If the bill is in the company name, and the contract is between the company and the provider, then put the full amount of the rental and call charges on form P11d at section K.

If the landline is registered in your personal name, then it is regarded as a payment made on behalf of the employee. You must report on form P11d at section B the total of all line rental and call charges, including all calls for business use.

It may be possible, depending on your circumstances to claim an expense deduction for any business calls you make, but unfortunately no deduction is allowed for a proportion of broadband costs.

If you are making numerous calls for business purposes, it is more tax efficient for you to receive the use of a company mobile, registered in the company name. No tax or NIC liability arises on the use of a company mobile, even where the mobile is used for private calls.

By Jo Nockels

Disclaimer: Advice shared in this blog is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this forum, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.

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