Running a limited company from home often blurs the lines between personal and business expenses. One area where directors commonly trip up is with claiming broadband, landline, and mobile phone costs.
Let’s break down what’s allowed — and what can get you into trouble with HMRC.
Home Broadband
If your broadband is a personal contract and used partly for work, you can’t just put the whole bill through the company.
- You can only claim additional costs directly caused by business use (which is rare with unlimited broadband packages).
- Alternatively, you can claim a small home working allowance (£6 per week, or £26 per month without needing receipts).
However, there’s an important exception:
If you didn’t have broadband at home before and only installed it because you needed it for work, you may be able to claim the cost, even if the contract is in your personal name.
To rely on this exception:
- The broadband must have been installed purely for business reasons.
- Any personal use must be insignificant (minimal private browsing, no family streaming, etc.).
- Ideally, you should have evidence (e.g., emails or notes) showing the business need at the time of installation.
If broadband already existed before you needed it for work, this exception doesn’t apply — you would only be able to claim a proportion relating to additional business use.
For cleanest claims, setting up a separate business broadband contract is still the best option.
Home Landline
Home landlines are even trickier.
- If your landline is mainly for personal use, you can’t claim the standing charges.
- You can only claim itemised business call charges.
- As with broadband, a separate business-only phone line makes claims simpler and safer.
Mobile Phones
Mobile phones offer more scope, but only if structured correctly.
- If the mobile contract is in the company’s name, you can claim the full cost (even if there’s some incidental personal use — it’s not taxed as a benefit).
- If the contract is in your personal name, you can only claim business call charges — and separating them from bundled deals can be messy.
Setting up a company-owned mobile is usually the easiest and most tax-efficient route.
The Golden Rule: “Wholly and Exclusively”
HMRC expects any cost claimed by your limited company to be “wholly and exclusively” for business.
- Mixed-use personal bills don’t meet that standard unless you’re only claiming extra business-specific costs.
- Expenses made out to you personally (not the company) should be treated cautiously and properly evidenced.
Final Thoughts
While it might feel tempting to roll personal broadband, landline, and mobile bills into your company’s accounts, the risks of HMRC scrutiny and potential tax penalties aren’t worth it.
If in doubt, set up separate contracts in your company’s name — or keep claims simple by sticking to small, well-documented allowances.
