Sole trader mobile phone expenses are one of the most commonly under-claimed costs on Self Assessment returns — usually because people aren’t sure what a “fair” claim looks like. The rules for the self-employed are actually simpler than for limited companies: no benefit-in-kind, no P11D, just an honest split between business and personal use. Here’s how it works for 2026, and when a dedicated business mobile makes the whole question disappear.
Sole trader mobile phone expenses: the basic rule
As a sole trader, you and the business are the same legal person. You don’t “provide yourself” with a phone — you simply deduct the business share of what the phone costs you.
- Mixed-use phone: claim the percentage of your bill that relates to business use
- Dedicated business phone: if a phone is used wholly and exclusively for the business, the full cost is normally allowable
- What counts: airtime, data, the handset, repairs, insurance and business-related accessories — all in proportion to business use
The “wholly and exclusively” test is HMRC’s yardstick for sole trader expenses. A phone that also runs your personal life fails that test as a whole — which is why you apportion instead.
How to work out your business percentage
There is no official fixed percentage — the claim has to be reasonable and one you could defend. Common approaches:
Usage-based split
Review an itemised bill or your screen-time data for a typical month. If roughly 60% of calls, messages and data relate to work, claim 60% of the bill. Keep the evidence you used — a saved bill with a note of your working is enough.
Time-based split
Some sole traders base the split on working pattern — for example, the phone is effectively a work device five days out of seven. This can be reasonable for trades where the phone is the booking line all day.
The two-phone approach (cleanest)
Run a second SIM or handset purely for the business. The entire cost becomes allowable, there’s no percentage to defend, and your business number stays separate from your personal one. Business SIM-only plans start from around £5–£6/month in 2026, so the “clean claim” often costs less than the accounting time it saves — see our one-man-band business mobiles guide for how sole traders set this up.
What sole traders can claim on a mobile phone
- Monthly tariff — calls, texts and data, in your business proportion
- Handset cost — apportioned like the tariff; a dedicated business handset is normally fully allowable
- Repairs and insurance — same proportion as the phone itself
- Extra business costs — itemised business calls or roaming above your bundle are fully claimable, because they’re a purely business cost
Record-keeping is light but real: keep your bills, note your percentage and how you arrived at it, and review it if your usage changes. If you’re VAT-registered, you can also reclaim the business share of the VAT — a business tariff with proper VAT invoices makes that much easier.
Worked example (illustrative)
A self-employed electrician pays £30/month for a SIM with unlimited calls and 100GB of data, and estimates 70% business use from a typical itemised bill. That’s £21/month — £252/year — as an allowable expense, reducing taxable profit pound for pound. At the basic rate of income tax plus Class 4 National Insurance (2026/27 rates), that’s a meaningful saving for two minutes of maths. A £15/month dedicated business SIM claimed at 100% (£180/year) with zero apportionment arguments is often the better trade.
Where it goes on your Self Assessment
Phone costs belong in the office and communication costs section of the self-employment pages — the box HMRC labels for phone, stationery and other office costs. Two practical notes:
- Cash basis vs traditional accounting: most small sole traders use the cash basis, so you claim costs when you pay them — a handset paid for in March lands in that tax year
- Under the trading allowance? If you claim the £1,000 trading allowance (2026/27) instead of expenses, you can’t also claim phone costs — it’s one or the other
Software like FreeAgent or QuickBooks will categorise this automatically if you tag the transaction, which is another argument for paying the phone bill from your business bank account rather than a personal one.
Common mistakes sole traders make
- Claiming 100% of a mixed-use phone — the single most common error; if your personal life runs on the same SIM, apportion it
- Claiming nothing at all — just as common, and pure waste; even 40% of a £25/month bill is £120/year off your taxable profit
- No evidence for the split — a one-line note with a saved bill is all it takes; a bare number with no working is what gets challenged
- Forgetting the handset — the device is claimable in the same proportion as the airtime, not just the monthly bill
- Using the limited-company rules — sole traders don’t get the “exempt benefit” treatment; that only exists for companies providing phones to employees
Sole trader vs limited company: the rules are different
If you incorporate, the phone rules flip completely. A limited company claims phone costs by putting the contract in the company’s name, which makes the phone an exempt benefit — the percentage-apportionment approach above no longer applies. If you’re weighing up incorporation, or you’ve recently formed a company, read our guide to claiming mobile phone expenses through a limited company — using the sole trader method with a company is one of the most common errors accountants see.
And if you take on staff, providing their phones raises employer questions — covered in our guide to company mobile phones for employees.
What about broadband, second SIMs and data-only plans?
The same business-proportion logic extends to the rest of your connectivity:
- Home broadband: if you work from home, you can claim the business share of your broadband on the same reasonable-apportionment basis — though a line used mostly by the household supports only a modest claim
- Data-only SIMs and dongles: a data SIM used purely for work (a van tablet, a card reader, a site hotspot) is normally fully allowable
- Second numbers without a second phone: an eSIM lets one handset carry separate personal and business numbers — the business line’s cost is then cleanly claimable; see our business eSIM guide
The pattern is always the same: pure business use means a full claim, mixed use means a defensible proportion.
When a dedicated business mobile beats apportioning
The percentage method works, but it has hidden costs: you have to justify the split, VAT reclaims get messy, and your personal number becomes your business’s front door. A dedicated business line fixes all three, and adds practical benefits — a professional number you can publish, spend caps to prevent bill shock, and the option to keep the number if you later incorporate or hire.
This isn’t tax advice — everyone’s numbers differ, so confirm your approach with your accountant. But as a rule of thumb: if your phone is genuinely central to how you earn, a separate business SIM usually pays for itself.
Get a quote: Business Mobiles or Hosted VoIP
Frequently Asked Questions
Yes. You claim the business proportion of your phone costs — tariff, handset, repairs and insurance — on your Self Assessment. If the phone is used wholly and exclusively for business, you can normally claim the full cost.
Whatever honestly reflects your business use — there’s no fixed HMRC percentage. Base it on an itemised bill or typical usage pattern, keep a note of your working, and review it if your usage changes. Claims you can’t evidence are the ones that cause problems.
Yes — apportioned to business use like the tariff. A handset bought purely for business is normally fully allowable. Phones on monthly device plans are claimed through the monthly cost instead.
No. Benefit-in-kind rules apply to employees and directors of companies, not to sole traders. You simply deduct the business share of your costs. If you trade through a limited company, different (and more generous) rules apply.
Often, yes. A dedicated business SIM from around £5–£6/month makes the whole cost claimable with no apportionment, gives you a publishable business number, and keeps VAT reclaims clean if you’re registered. It usually costs less than the hassle it removes.