Key thresholds
No fixed threshold. HMRC's own example (gov.uk/expenses-if-youre-self-employed): annual bill £200, business use £70, claimable amount £70. For the handset on traditional accounting: AIA limit of £1 million per year applies.
Common questions
I use my personal mobile for work and personal calls — about 60% for the business. Can I claim something?
Yes. Work out your business percentage and claim that share. If your monthly contract is £40 and 60% is for work, claim £24 a month — £288 a year. Keep a simple note of how you worked it out.
I bought a new smartphone for £800 purely for work. Can I claim the full cost?
On traditional accounting, the handset is a capital purchase. Claim the full £800 via AIA in the year you bought it. On cash basis, just deduct it as a normal expense in the year you paid. If you also use it personally, reduce the claim by that percentage.
I want to get a second SIM on PAYG just for business. Does that make the tax simpler?
Yes. A dedicated business SIM means 100% of that line is for work. No percentage to calculate. Claim the full top-up or contract cost and keep the receipts.
Watch out for
—HMRC states you cannot claim any non-business use of a phone. There is no rule letting you claim 100% of a phone that is also used personally. A high proportion (e.g. 90%) is fine if you have records to back it up, but 100% on a mixed-use phone is not supported by HMRC guidance.
—If your phone contract bundles the handset cost into the monthly payment, the tax treatment is less clear. HMRC has not published specific guidance on this. If the amounts are significant, check with an accountant.
—If you claim home-office costs using the rooms method, that covers your broadband and landline. It does not cover your mobile. Always split your mobile bill separately, based on call and data usage.
Common mistakes
—Claiming 100% of a personal mobile bill. HMRC is clear you cannot claim non-business use. Work out your business percentage and keep a note of your method.
—Missing that a handset bought outright may be a capital item on traditional accounting. A phone costing a few hundred pounds should go through capital allowances, not as a day-to-day expense.
Cash basis vs traditional accounting
Your monthly contract or PAYG costs are a day-to-day expense on both methods, deducted in the period you paid. The handset is different: on traditional accounting, use capital allowances (AIA); on cash basis, it is a normal expense in the year you bought it.
HMRC does not publish a specific mobile-phone expenses guide. The rules derive from the general allowable expenses guidance for self-employed people. If you are claiming a large amount, keep a contemporaneous record of your apportionment method.
This is general guidance only and does not constitute tax advice.
HMRC sources
Last verified: May 2026 · Tax year 2026/27