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Mobile phone invoice

  • 11 posts
  • # 55422

Hi All,

I've recently taken over the books for a Ltd company where all the charges for a mobile phone which is in one of the director's sole name (the invoice is in his name)  are being entered into the books as a business expense. I checked with the directors (husband & wife) and they confirmed by e-mail that the phone is used soley for business purposes. Firstly is this ok given that the invoice is not in the company's name?

As a further development to this the director who has the phone in his name has now resigned his directorship  but the other director (his wife) has confirmed that the phone will still be used by her for solely business purposes, however the invoice is still in her husband's name. Going forward would the phone need to be registered in the company's name for all the charges relating to it to be included as a business expense or alternatively would it  be ok for the phone to be transferred into the wifes sole name or indeed remain in the husband's name to do this?  

Any help or advice would be much appreciated.

Kind Regards



Richard

 

  • 698 posts
  • # 55431

Hi Richard

If the expenses is incurred soley for the business then you can put it through and claim the VAT.

I would suggest rather than puttinh the bill in the company purchase ledger it would be more prudent to go through the DLA or indeed for the Director concerned to fill in an expenses claim.

As it is not unusual for a Husband and Wife to have one contract with multiplw handsets then I would not worry too much whose name the bill is under as long as they confirm that the handset is for the use of the business.

Prudence would dictate at some point the bill would be better off in the companies name but in this case it is not essential in my humble opinion.

Kind regards
Stuart

  • Member PM.Dip
  • Practice Licence
  • 117 posts
  • # 55436

Hi Richard

I agree with Stuart it should be OK to put through the business and even claim the VAT, if relevant.  If HMRC looked into it they could request the itemisation to prove it is all business.

If it hasn't already the company should probably look into getting a dispensation notice.  Going through that procedure should motivate the director to get the contract in the company name!

Regards

Andrew

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