Can I reclaim VAT on the cost of my mobile phone

brophs

Hi all,

Just wondering whether I'm entitled to claim back the VAT I paid when I bought a new handset recently, as I needed something with email capability etc.?

Thanks.

bryaner

If you have a registered company you can, if your a sole trader you cant.

Edit: I think.

elaverty

If he is a Sole Trader with a VAT number of course he can,,,,it dosnt make any difference if he is a Limited company or a soletrader once he has a VAT number,,,

Slasher

....and assuming the phone is to be used wholly and exclusively for the business.

bryaner

elaverty wrote: »

If he is a Sole Trader with a VAT number of course he can,,,,it dosnt make any difference if he is a Limited company or a soletrader once he has a VAT number,,,

Do you not have to trade over a certain amount before you can obtain a vat num?

MBateson

You're obliged to register if you're over a certain amount, you have the option to do so if under that amount.

If you're thinking sole traders are only small affairs, they can have turnovers as big as most Irish companies.

srsly78

Business mobiles are fully expensable, and VAT can be reclaimed. Mobile companies however won't knock the VAT off, you gotta reclaim it yourself.

elaverty

bryaner wrote: »

Do you not have to trade over a certain amount before you can obtain a vat num?

Yes you have to have a certain turnover so as to be able to charge and claime VAT ie be registered ,,,,He obiously is registered for VAT if he is asking if he can claim back the VAT..(haveing said that if he hasnt got a VAT number and is not registered,and is asking if he can claim the VAT i think he should see a good accountant:):))

Legend100

elaverty wrote: »

Yes you have to have a certain turnover so as to be able to charge and claime VAT ie be registered )

This is incorrect, you can elect to be VAT registered even where you are under the turnover threshold

You are obliged to register when you are over the turnover threshold

elaverty

And why would someone elect to be registered if they are under the threshold ?..

Legend100

many reasons for eg if you were supplying a zero rated good, you could reclaim VAT on your inputs thereby gaining a VAT benefit - an actual cash refund of up to 21% versus income tax relief at an effective rate of much less as non registered

The property benefits are enormous but i will not discuss them....dont wana risk a ban:)

And apologies OP, we are gone off topic

barneystinson

elaverty wrote: »

And why would someone elect to be registered if they are under the threshold ?..

If they knew they would be in a refund position by being registered. (i.e. their sales are at zero rate for VAT).

Or if all of their sales are to other VAT registered people (who will be entitled to a deduction for the VAT they are charged), being registered in order to recover the VAT on inputs...

brophs

Thanks for the responses. The phone is, for the most part, for work use, as I'm not much of a phone user personally. Do I have to discount it by a certain amount for personal use, or does that disallow claiming for it entirely?

Thanks.

srsly78

Nope, it's 100% expensable no questions ask. Mobile phones are special in this regard, most other things you would have to split the personal/business use.

edit: Appears I was wrong, feck that accountant with his terrible advice. Here is the exact wording from revenue website: http://www.revenue.ie/en/tax/it/leaflets/benefit-in-kind/faqs/miscellaneous.html#misc33

"If an employee uses a company mobile phone for private calls and pays for the private calls, how is the taxable benefit calculated?

Where a mobile phone is provided for business purposes a taxable benefit will not be treated as arising where any private use is incidental. Where the employee reimburses the employer for the cost of private calls, there will be no taxable benefit arising e.g. any taxable benefit is reduced by any amount made good by the employee to the employer."

In reality they let you away with it, but I was wrong you are supposed to split the personal use. Noone that I know of bothers tho -.- All comes down to what "incidental" means. Grey area etc etc. The thing is you probably have a contract with X free calls anyway. These are wasted if not used... so.....

sled driver

srsly78 wrote: »

Nope, it's 100% expensable no questions ask. Mobile phones are special in this regard, most other things you would have to split the personal/business use.

edit: Appears I was wrong, feck that accountant with his terrible advice. Here is the exact wording from revenue website: http://www.revenue.ie/en/tax/it/leaflets/benefit-in-kind/faqs/miscellaneous.html#misc33

"If an employee uses a company mobile phone for private calls and pays for the private calls, how is the taxable benefit calculated?

Where a mobile phone is provided for business purposes a taxable benefit will not be treated as arising where any private use is incidental. Where the employee reimburses the employer for the cost of private calls, there will be no taxable benefit arising e.g. any taxable benefit is reduced by any amount made good by the employee to the employer."

In reality they let you away with it, but I was wrong you are supposed to split the personal use. Noone that I know of bothers tho -.- All comes down to what "incidental" means. Grey area etc etc. The thing is you probably have a contract with X free calls anyway. These are wasted if not used... so.....

I'm afraid your edit is incorrect aswell.

The link you've posted deals with calculating Benefit in Kind (BIK) on the use of company mobile phones, where incidental personal usage is essentially not treated as a taxable benefit. However that leaflet is exclusively in relation to BIK and has nothing to do with the entitlement to recover VAT on mobile phones.

In order to reclaim VAT on purchases, the cost must be incurred for the purposes of the business and VAT on costs used for any other purpose cannot be reclaimed.

srsly78

Oops I see that now.

Many people have a business mobile. Seeing as you get X free calls with any contract the end result is pretty much the same no (you don't pay anything for personal use)? The only time I get charged extra is when I'm roaming in the UK, and that is because I'm here on business.

sled driver

srsly78 wrote: »

Oops I see that now.

Many people have a business mobile. Seeing as you get X free calls with any contract the end result is pretty much the same no (you don't pay anything for personal use)? The only time I get charged extra is when I'm roaming in the UK, and that is because I'm here on business.

Dispel the myth that you get "free calls". You pay a fixed amount per month for a bundle of calls and so the more calls you make the cheaper each individual call becomes. If, for example, you make 100 calls in a given month and 5 of them are personal, then technically 5% of the VAT for that months bill should not be reclaimed as that cost was not incurred for the purpose of the business.

I agree with you that the amounts involved may not be significant, but the salient point that I was trying to get across is that there is no relaxation of the rules in VAT for incidental personal use.

Hope that makes sense.

srsly78

I claim the basic price of contract + internet addon as business expense. Then I reclaim VAT on this. I do not claim for anything extra over the minimum spend. Am I doing it right? This keeps the books simple.

I don't even claim for the extra cost business calls while abroad, breaking all this stuff down would be more hassle than it's worth.

sled driver

srsly78 wrote: »

I claim the basic price of contract + internet addon as business expense. Then I reclaim VAT on this. I do not claim for anything extra over the minimum spend. Am I doing it right? This keeps the books simple.

I don't even claim for the extra cost business calls while abroad, breaking all this stuff down would be more hassle than it's worth.

I'm mindful of falling foul of giving specific advise here, so to summarise my previous posts, the VAT element of any private use should not be claimed.