Limited company guide
The mobile phone exemption, how to buy laptops and equipment tax efficiently, broadband, software subscriptions and the trap of paying a personal contract from the business account.
Short answer
One mobile phone per director or employee, with the contract in the company's name, is exempt from tax even with unlimited private use. Laptops and equipment bought by the company for business use with only incidental private use carry no benefit charge and attract capital allowances or a direct deduction. A phone contract in your own name paid by the company is taxable earnings, which is why the contract holder matters more than who uses the phone.
Written and reviewed by Waqas Sagar Member of ICAEW, Fellow of ACCA, Fellow of AAT, a double graduate and entrepreneur at heart, helping startups grow and serving thousands of businesses nationwide with an excellent team. Published by LimitedCompany.Accountants, 12 London Road, Morden, London SM4 5BQ. Reviewed 12 September 2026 against 2026/27 UK rates and current Companies House and HMRC guidance.
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QuickBooks PartnerCertified ProAdvisor100+ yearsCombined team experienceFully insuredUp to £2m indemnityOne mobile phone per director or employee, with the contract in the company's name, is exempt from tax even with unlimited private use. Laptops and equipment bought by the company for business use with only incidental private use carry no benefit charge and attract capital allowances or a direct deduction. A phone contract in your own name paid by the company is taxable earnings, which is why the contract holder matters more than who uses the phone.
Mobile phones
Laptops, monitors and equipment
Broadband and home internet
Software and subscriptions
Before you act
The exemption covers one phone per employee, including the handset, the line rental and all calls and data, with no restriction on private use — provided the contract is between the provider and the company.
If the contract is personal, the company paying it is settling your debt: the cost is taxable as earnings with National Insurance. Switching the contract to a business account is a five-minute job that removes the problem entirely.
Where the company buys and owns the equipment and provides it for business use, incidental private use does not create a benefit. Keep the asset on the company's fixed asset register and claim the Annual Investment Allowance.
Low-value items are often written off to the profit and loss account as consumables instead. Either way the relief arrives; the difference is presentation.
A dedicated business line in the company's name is fully deductible. A home broadband contract in your name that you would have anyway is not; that cost belongs in the use-of-home calculation.
Where the company takes over the contract and private use is not significant, it can be provided without a benefit charge, but that is rarely realistic for a family home.
Cloud software, hosting, design tools, accounting subscriptions and professional publications used for the business are deductible in full when paid by the company.
Split-use subscriptions — a streaming service used for research, for example — need an honest apportionment or they should stay personal.
Rates, thresholds and deadlines quoted here reflect the 2026/27 UK tax year. Check current GOV.UK guidance, or ask us, before relying on them for your own company.
Primary references
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Frequently asked
Yes, tax free, if the contract is in the company's name. A personal contract paid by the company is taxable earnings.
The exemption covers one phone per employee. A second phone creates a benefit in kind unless private use is genuinely prohibited and insignificant.
Not where the company owns it, provides it for work, and private use is incidental.
Not the personal contract you would pay anyway. Reflect the business use in the use-of-home allowance instead.
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Deadlines, thresholds and filing rules change. GOV.UK and Companies House publish the current statutory position; advice should then be applied to your company’s circumstances.
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