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What’s the most tax effective way to use a smartphone for my business?

"Apparently we love our own cell phones but hate everyone else's."

Joe Bob Briggs

Before you get your company to splash out on the latest all singing, all dancing, fingerprint recognising smart phone (can it make the coffee too?), make sure you do things properly or you could end up with another unwanted tax bill.

Like a lot of people I speak to, you may know about the tax exemption for mobile phones...

..however you need to understand the rules if you don't want to fall foul of the taxman.

Your company can provide you with a mobile phone (or SIM card) as a perk and you can make both business and personal calls on it without you having to pay any tax.

And the company can claim back the VAT and deduct the cost as an expense against its profits.

But be aware - iPads, laptops and tablet PCs are not covered by the exemption.

To claim the exemption you must meet the following conditions:

1) Your company can buy the phone and you can use it freely, however ownership of the phone must not be transferred to you.

2) The contract must be between the mobile phone company and your company not between the mobile phone company and you personally.

3) The company must only provide one phone per employee (so don't think you can get brand new iPhones for your kids at the taxman's expense!).

As long as you avoid these pitfalls you can enjoy all the benefits of the latest iPhone (or Samsung Galaxy) without paying a penny to the tax man.

For more information and any other tax saving tips please feel free to contact me at:

[email protected]

And remember, these tips are not a replacement for professional advice tailored to your precise needs and circumstances.

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