Can I Claim My Mobile Phone as a Business Expense as a UK Sole Trader?

Yes, you can claim your mobile phone as a business expense as a sole trader, but only the portion that relates to business use. This is one of those expenses almost every sole trader is entitled to claim and many either skip entirely or claim incorrectly.

This post explains exactly how the rules work, how to calculate a defensible business-use percentage, why the contract holder matters less than you might think, and the simplest way to avoid the apportionment question altogether.

The Basic Rule

Mobile phone costs follow the same wholly and exclusively rule that governs every allowable expense. If your phone is used entirely for business, you can claim the full cost. If it is used for both business and personal purposes, which is the reality for almost everyone, you can claim only the business-use proportion.

The cost you can claim includes the monthly contract or tariff, business calls and data, the handset if bought for business use, repairs to the phone, and accessories such as a charger, case or hands-free kit used for business. All of these are claimed at your business-use percentage if the phone is mixed-use, or in full if the phone is used solely for business.

The Two Scenarios

There are really only two situations to understand, and which one you are in determines how you claim.

The first is a dedicated business phone. If you have a separate phone and contract used solely for business, you can claim 100% of the cost with no apportionment needed. This is the cleanest approach and removes any question of how to split personal and business use. For sole traders with significant phone use, taking out a second contract purely for business is genuinely worth considering, because it simplifies the claim and reduces the risk of an HMRC query.

The second is a single phone used for both business and personal life. This is the situation most sole traders are in. You use the same phone to call clients and to call your family, to handle work emails and to scroll social media. In this case you claim a reasonable business-use percentage of the total cost.

How to Work Out a Reasonable Percentage

HMRC does not prescribe a specific method for calculating the business-use percentage. What it expects is that your figure is fair, reasonable and based on your actual usage rather than rounded up to suit your tax bill.

The most defensible approach is to keep a rough log of your usage over a typical period, such as a month, noting roughly how much of your phone time is spent on business activities compared to personal use. If business use comes out at around 50%, you claim 50% of your monthly contract cost. If it comes out at 40%, you claim 40%.

A worked example: A sole trader pays £40 per month for their phone contract and uses it around 50% for business. The annual claim is £40 multiplied by 50% multiplied by 12 months, which is £240 per year. At basic rate income tax plus Class 4 National Insurance, that saves £62 in tax. At higher rate, it saves £101.

The percentage does not need to be precise to the decimal point. HMRC is not interested in whether you used 53% or 57% for business. What matters is that the claim looks fair and is supported by a reasonable method you can explain if asked. The real risk lies at the extremes. Claiming 100% of a phone that clearly serves your personal life as well is far more likely to be challenged than claiming a sensible 40% or 50%.

The Contract Holder Question

A common misconception is that you can only claim phone costs if the contract is in your business name. For sole traders, this is not true.

As a sole trader, you and your business are the same legal entity for tax purposes. This means you can claim the business-use proportion of your phone costs even if the contract is in your personal name, as long as the usage genuinely relates to your business. The contract holder issue matters for limited companies, where the contract must be in the company name to claim the full cost, but it does not apply to sole traders in the same way.

So if your phone contract is in your personal name and you use it partly for business, you claim the business proportion. No need to switch the contract to a business account or change anything about how you hold it.

The Handset Itself

If you buy a new phone and use it for business, the cost of the handset is claimable on the same basis as the contract. If the phone is used solely for business, claim the full handset cost. If it is mixed-use, claim the business proportion.

For a sole trader buying a £600 phone used 50% for business, the claimable amount is £300. Depending on your circumstances and the cost, this may be claimed in full in the year of purchase or through the Annual Investment Allowance, but the relief available is the same either way. Keep the receipt for the handset purchase.

What to Keep as Records

You do not need to send your phone bills to HMRC with your tax return, but you do need to keep them in case HMRC asks to see them later. The records that support a phone claim are the monthly bills or contract statements, a note of how you calculated your business-use percentage, and the handset purchase receipt if you claimed the cost of the phone.

A simple note explaining your reasoning is enough. Something like "phone used approximately 50% for business based on a typical month of client calls, work emails and business admin" gives HMRC the context they need if they ever ask. The note should be honest and consistent year to year.

The Simplest Approach

For sole traders who want to avoid the apportionment question entirely, the cleanest solution is a second phone used only for business. A cheap SIM-only contract on a separate handset, used solely for client calls and business activity, can be claimed in full with no percentage calculation required. For sole traders with heavy business phone use, the saving from claiming 100% of a dedicated contract often outweighs the cost of running a second line, and the admin is significantly simpler.

For most sole traders with moderate phone use, a reasonable percentage on their existing phone is perfectly adequate and avoids the cost of a second contract. The right choice depends on how much you use your phone for business and how much you value the simplicity of a clean 100% claim.

Where This Fits in the Bigger Picture

Mobile phone costs are one of several home and admin expenses sole traders consistently underclaim. The phone claim sits alongside the home office claim, which can be made using either the simplified flat rate or the actual cost method depending on your situation. Our guide to claiming home office expenses explains how broadband and phone costs can be claimed on top of the simplified flat rate, which is directly relevant if you work from home and want to claim both.

For the full picture of how all your allowable expenses reduce your tax bill, our walk-through of how much tax sole traders pay in 2026/27 includes an interactive calculator that shows your bill before and after claiming expenses like this one.

The Template That Tracks This Automatically

The UK Sole Trader Tax Template includes telephone and communication costs as one of its 20 pre-built expense categories. You enter your phone cost and business-use percentage once, and the template factors it into your running tax calculation alongside every other expense.

Get the UK Sole Trader Tax Template, £9.99 →