📱 Can Your Company Pay for Your Mobile Phone (Tax-Free)? Yes – Here’s How!

When you’re running a limited company, you’re always looking for smart ways to keep costs down and make the most of tax-efficient benefits. One question I get asked often is:

“Can my company pay for my mobile phone — and is it really tax-free?”

And the answer is... yes! 🎉
Done right, your mobile phone can be a totally tax-free benefit — for directors and employees. Let’s break it down.

✅ What’s included in the tax-free benefit?

If your company sets this up correctly, you can enjoy a fully paid-for mobile phone — and not just the device itself. The benefit can cover:

• The cost of the phone 📱

• The monthly line rental

• Business and personal calls (yes, even your weekend chats!)

• Data charges and internet use

And best of all? It’s not a taxable benefit — no income tax or National Insurance applies. 🙌

🛑 But there are a few important rules…

To stay within HMRC’s guidelines, here’s what needs to happen:

1. The contract must be in the company’s name — not yours personally.

2. The company must pay the bill directly — no reimbursements.

3. Only one phone per employee or director qualifies for the exemption.

Stick to those, and you’re golden. Try to claim more than one, or do it under your personal name, and you could end up with a tax bill. 😬

💬 But what about smartphones? Aren’t they classed as computers?

This used to be a bit murky — especially with smartphones acting more like mini laptops in our pockets.

HMRC originally tried to argue that smartphones were computers (and therefore didn’t qualify for the exemption), but they’ve since changed their stance. They now clearly accept that smartphones are mobile phones — meaning your iPhone or Samsung does count. ✅📲

⚠️ What not to do:

• Don’t put the phone contract in your own name

• Don’t pay personally and try to claim it back from the company

• Don’t assume multiple phones are tax-free — it’s one per person only

🎯 Final thoughts

This is one of those lesser-known but super-useful perks of running a limited company. It’s simple to set up, totally above board, and saves you a nice bit of tax while keeping you connected.

So if you haven’t already sorted your company mobile phone the tax-efficient way — now’s the time to do it. Just remember: contract in the company name, company pays the bills, and one phone per person.

Want more tax-saving tips like this delivered weekly? Keep an eye on my Tax Question of the Week email series — helping you stay smart, confident and in control of your business finances, one small win at a time. 💼✨