Can I claim for a business mobile phone?
Answered 11 March 2026
Great, I now have sufficient information to provide a comprehensive answer. The question "Can I claim for a business mobile phone?" could relate to an employee or a self-employed person, so I'll cover the key scenarios.
Can I Claim for a Business Mobile Phone?
The answer depends on your situation — whether you are an employee or self-employed, and whether the phone is employer-provided or your own.
What the law says
Employer-provided phone (employees): Under Section 319 ITEPA 2003, no liability to income tax arises in respect of the provision of one mobile telephone for an employee (without any transfer of property in it). The exemption covers the telephone itself, any line rental, and the cost of private calls paid for by the employer.
Phones used solely for business (employees): Where a mobile phone is provided solely for business use with no significant private use, it is exempt under Section 316 ITEPA 2003 — and this can cover more than one phone.
HMRC guidance / practice
Scenario 1 – Employer provides the phone:
- The provision of one mobile phone to a director or employee is exempt from charge under the benefits code. The exemption covers the telephone itself, any line rental, and the cost of private calls paid for by the employer.
- If two phones are provided for business and private use, one will be exempt and the other will be a taxable benefit. The employee and employer can decide which is which.
- ⚠️ Important exception: If the phone is provided via a salary sacrifice arrangement, the exemption does not apply, and the amount sacrificed is treated as earnings.
Scenario 2 – You use your own phone for business calls (employees):
- A deduction can be permitted for the actual cost, necessarily incurred, of telephone calls made in the performance of the duties of the employment.
- Mobile phone tariffs can be complex. If your tariff includes free minutes and your business calls fall within that free allowance, no deduction is available as no cost has been incurred.
- Where calls are charged, you can claim a proportionate deduction based on business call time vs. total call time. For example, if 75% of charged call time is business, you can deduct 75% of the call charges.
- The line rental itself cannot generally be deducted unless it is wholly and necessarily for business, as it is a fixed cost regardless of business use.
VAT (for businesses/employers):
- Line rental for mobile phones is treated as incurred for business purposes, so the VAT on line rental is input tax.
- If private use is allowed, the VAT on calls should be apportioned. A straight percentage apportionment based on a representative sample is acceptable to HMRC.
In summary: | Situation | Tax treatment | |---|---| | Employer provides 1 phone (incl. private use) | Exempt — no tax charge | | Employer provides phone solely for business | Exempt (can be more than 1 phone) | | Employer provides 2 phones (business + private) | 1 exempt, 1 taxable benefit | | Phone via salary sacrifice | Exemption does NOT apply | | Your own phone — business calls only | Deduct actual cost of business calls only | | Your own phone — free minutes cover all calls | No deduction available |
Citation sources
The exemption for mobile phones in Section 319 was substantially amended by Finance Act 2006 - see EIM21778 and EIM21779 for the revised rules for 2006/07 onwards. The provision of one mobile phone to a director or employee is exempt from charge under the benefits code (see EIM20006). The exemption covers the telephone itself, any line rental and the cost of private calls paid for by the employer on that telephone.
Some employees use their own mobile phone to make business calls. As for other telephones, see EIM32940, a deduction can be permitted for the actual cost, necessarily incurred, of telephone calls made by the employee in the performance of the duties of the employment. Mobile phone tariffs can be complex and it is not always easy to determine the actual cost of a business call. Some tariffs include a certain amount of free time in the rental charge. In these cases there may be no cost to be deduc
The restriction of the exemption in Section 319 to one mobile phone for private use, does not alter the treatment of mobile phones provided solely for business use, which continue to be exempt under Section 316 ITEPA 2003, as long as any private use is not significant (see EIM21613). If only one mobile phone is provided for both business and private use it will be exempt under section 319. If two mobile phones are provided for business and private use, one will be exempt and the other will repre
A construction engineer often works out of the office on construction sites. She uses a mobile phone so that she can keep in touch with the office. The phone is mainly used for business calls. The tariff for the mobile phone includes up to 10 minutes of free calls each month. In one month she pays £22, which is the rental charge only, because her total calls, all of which were business calls, amounted to 8 minutes. No deduction can be permitted because no expense has been incurred in making the
An employee sacrifices salary of £360 per year for a mobile phone. The benefit would otherwise be exempt from Income Tax under section 319 ITEPA 2003. The exemption does not apply because the benefit of the phone has been provided under optional remuneration arrangements. The cost of the benefit is deemed to be nil so the value of the benefit to treat as earnings from the employment is £360.