Andrew Needham looks at input tax recovery on a business's mobile phone charges.
Most employers provide their employees with mobile phones to enable them to contact their staff for business reasons. In some cases, the employers allow staff to make private calls while others do not. How much VAT can actually be reclaimed?
Business and private use
If a business buys its employees mobile phones for business use, it can reclaim all the VAT even if it allows private use. The business can also reclaim all the VAT it incurs on any standing charges for keeping it connected to the network (line rental), provided the charges do not contain any element for calls. If the business does not allow its employees to make private calls, it can also reclaim all the VAT incurred on the call charges as well.
By concession, HMRC will accept that there is no private use
