I am just doing the end of year accounts for a Sole Trader and have a couple of payments for mobile phone repairs which add up to over £200, I allow a percentage of the phone bills for business use and was going to use the same for the repairs but started to think that would it make a difference as in where the damage/fault had occurred.
For example, if it happened at work should 100% of the cost be allowed or if outside of work then should it be disallowed completely, I know for the small amount of tax involved HMRC probably wouldn't even care but just wanted to see what other peoples thoughts on the matter are.
Cheers
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
Hi Joanne
Not asked her yet as I am still going through the accounts and will wait and ask any queries all in one go but will let you know what the repairs are for when I have.
New avatar is just because I needed to get rid of the Xmas one and didnt have a clue what to have, so I thought ?
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
Nice one Vince, welcome to the punctuation mark club
The mobile phone receipts are for two separate repairs one for a cracked screen and another for a faulty button, not sure if they would be covered by insurance if she had it.
I am inclined to include at the same business percentage as I do for the calls.
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
Good question Doug. I'd be inclined to allow the same percentage as well. The repairs make good the phone so it can continue to be used at the same ratio.
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Good question Doug. I'd be inclined to allow the same percentage as well. The repairs make good the phone so it can continue to be used at the same ratio.
Thanks John
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
Ooooo now Im going to disagree on the basis of repairs not being W&E.
Personal phone/asset, business calls identifiable business element so ok. Repairs cover BOTH private and business function, no separate identifiable cost/duality of purpose so disallow.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Throwing a spanner into the mix, most contracts nowadays are call bundles so there's no identifiable way of costing business calls, so how do you split the ratio?
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John
Any advice given is for general guidance and professional advice should be sought applicable to your circumstances.
Throwing a spanner into the mix, most contracts nowadays are call bundles so there's no identifiable way of costing business calls, so how do you split the ratio?
Hi John
Bundles come under 'duality', so you cannot identify the business costs, unless said bundles show you the full activity which I believe you can get from some providers. otherwise I would suggest get two phoneS for s/e bods.
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Ooooo now Im going to disagree on the basis of repairs not being W&E.
Personal phone/asset, business calls identifiable business element so ok. Repairs cover BOTH private and business function, no separate identifiable cost/duality of purpose so disallow.
Hi Joanne
My original thought was to disallow but not for the reasons you have stated, more to do with where the damage occurred but then came to the conclusion that if a % of the bill was being used for business expenses then it stands to reason that this same % should be used for the cost of repairs, I do see your point about being W&E but I think (maybe wrongly) that if a part of the bill is allowed then so should repairs at the same rate.
If as John said the phone contract is a bundle, would you not allow any of the costs (calls & repairs) unless a breakdown could be supplied?
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Doug
These are only my opinions of how I see things and therefore should not be taken as advice
Ooooo now Im going to disagree on the basis of repairs not being W&E.
Personal phone/asset, business calls identifiable business element so ok. Repairs cover BOTH private and business function, no separate identifiable cost/duality of purpose so disallow.
Hi Joanne
My original thought was to disallow but not for the reasons you have stated, more to do with where the damage occurred but then came to the conclusion that if a % of the bill was being used for business expenses then it stands to reason that this same % should be used for the cost of repairs, I do see your point about being W&E but I think (maybe wrongly) that if a part of the bill is allowed then so should repairs at the same rate.
If as John said the phone contract is a bundle, would you not allow any of the costs (calls & repairs) unless a breakdown could be supplied?
Hi Doug
Just on the latter for the minute - W&E/duality states not. If you cannot determine the business related portion of the overall costs then how can you apply the rule to allow the business expense.
Unless of course you go down the log every call and use of the rest of the bundle route, keep your monitoring records as proof and then allocate a %. But then would you not have to re-do the calculation every few months to satisfy HMRC (which would end up more than the tax you save therefore not worth bothering with?)
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Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
