The Digital Toolkit: Understanding Your Allowable Expenses
As an influencer, your phone and internet connection are the lifeblood of your business. From creating content and engaging with followers to negotiating brand deals and managing your accounts, these digital tools are essential. The good news is that HM Revenue & Customs (HMRC) recognises this reality and allows you to claim these costs as legitimate business expenses, reducing your taxable profit. However, the question of what can influencers claim for phone and internet requires careful consideration, as HMRC has specific rules for mixed business and personal use. Getting it wrong can lead to compliance issues, while getting it right can save you hundreds of pounds each year.
Many influencers operate as sole traders, meaning their business income and expenses are reported through Self Assessment. For the 2024/25 tax year, the personal allowance is £12,570, and you only pay tax on profits above this threshold. Every legitimate pound you claim in expenses directly reduces your tax bill. With basic rate tax at 20%, a £1,000 claim saves you £200 in tax. For higher-rate taxpayers at 40%, the saving doubles to £400. This makes understanding what can influencers claim for phone and internet a financially significant part of your tax planning strategy.
Using dedicated tax planning software can transform this often-complex task. Instead of wrestling with spreadsheets and paper bills, you can automatically track usage, calculate accurate claim percentages, and maintain the detailed records HMRC expects. This not only ensures you claim everything you're entitled to but also provides a clear audit trail should HMRC ever have questions.
Breaking Down Phone Expenses: Contracts, Handsets, and Usage
When determining what can influencers claim for phone and internet, let's start with your mobile. HMRC distinguishes between the cost of the handset itself and the ongoing usage charges. If you have a phone contract that bundles a handset with calls, texts, and data, you need to separate these elements for your claim.
For the handset, if it is used solely for business, you can claim the full cost. However, this is rare for influencers. For mixed-use phones, you can claim a portion of the handset's cost as a capital allowance. The annual investment allowance (AIA) for 2024/25 is £1,000,000, but for a single phone, you would typically claim a percentage of its value based on business use. For example, a £800 phone used 70% for business allows a £560 capital allowance claim in the first year.
For monthly contract costs, you can claim the business portion of your bill. This includes data, call minutes, and texts used for business activities. To substantiate your claim, you need a reasonable method for apportioning use. This is where a tool like our tax calculator becomes invaluable, allowing for precise tax scenario planning based on different usage percentages.
- Dedicated Business Line: If you have a separate phone contract used exclusively for business, you can claim 100% of the cost. This is the simplest option from HMRC's perspective.
- Apportioned Personal Contract: For a single phone used for both purposes, you must calculate a fair business-use percentage. A detailed log of calls and data usage over a representative period (e.g., one month) is the gold standard for evidence.
- Pay-As-You-Go: If you use a PAYG phone for business, you can claim the full cost of top-ups used for business purposes. Keep all receipts and note the business purpose for each top-up.
Navigating Internet Costs: Broadband and Mobile Data
Your internet connection is equally critical. Whether it's home broadband or mobile data used as a hotspot, you need a defensible method for claiming these costs. For home broadband, HMRC understands that it's almost always a mixed-use expense. The key is to establish a fair and reasonable basis for splitting the cost.
So, what can influencers claim for phone and internet when it comes to your home broadband? You cannot simply claim 50% without justification. HMRC expects a logical basis, such as:
- Time Apportionment: Tracking the amount of time spent online for business versus personal activities. This can be done using time-tracking software or a detailed diary.
- Data Usage: Some routers allow you to monitor data consumption by device or over time. If you can show that 40% of your total data download is for uploading videos, managing social media, and other business tasks, you can claim 40% of your broadband bill.
If you frequently work outside your home and rely on mobile data, you can claim the business portion of any data add-ons or the data used from your general plan. The same principles of apportionment apply. Keeping a log of when you use mobile data for business (e.g., for client calls, posting content on the go) helps build a robust case for your claim. Accurate real-time tax calculations within a tax planning platform can instantly show you the tax impact of different claim percentages, helping you make informed decisions.
Record-Keeping: Your First Line of Defence
When HMRC reviews your tax return, the burden of proof is on you. Simply estimating your business use is a risky strategy. You must keep detailed records for at least 5 years after the 31 January submission deadline for the relevant tax year. This is non-negotiable for maintaining HMRC compliance.
Your records should include:
- All phone and broadband bills (paper or digital).
- A usage log or diary demonstrating business use. For a phone, this could be a record of business calls and data-intensive tasks over a sample period.
- Receipts for any handsets or dongles purchased.
- Notes explaining your chosen method of apportionment and how you arrived at the business-use percentage.
This is where technology truly shines. Manually maintaining these records is time-consuming and prone to error. A comprehensive tax planning platform can help you store digital copies of bills, track usage, and apply your apportionment rules consistently, creating a watertight digital paper trail. This systematic approach is fundamental to understanding exactly what can influencers claim for phone and internet without the administrative headache.
Practical Scenarios and Common Pitfalls
Let's look at a practical example. Chloe is a lifestyle influencer. She uses one phone for everything. Over a three-month sample period, she logs her usage and finds that 65% of her call time, 80% of her data, and 60% of her texts are for business. She takes a conservative approach and applies a 70% business use claim to her £45 monthly contract and a 70% claim on the handset's value.
Annual Phone Claim: (£45 x 12 months) x 70% = £378
Handset Claim: £700 value x 70% = £490 (as a capital allowance)
Total Reduction in Taxable Profit: £868
As a higher-rate taxpayer, this claim saves Chloe £347.20 in tax (£868 x 40%). This clearly demonstrates why knowing what can influencers claim for phone and internet is so valuable.
Common pitfalls to avoid include:
- Over-claiming: Claiming 100% for a phone you clearly use personally is a red flag for HMRC.
- Inconsistent Methods: Changing your apportionment method year-on-year without good reason can raise questions.
- Poor Records: Failing to keep bills and usage logs makes it impossible to defend your claim during an enquiry.
Leveraging Technology for Accurate Claims
Manually calculating these expenses is complex. This is precisely where modern solutions excel. By using a dedicated platform, you can move from guesswork to precision. The right software automates the tracking and calculation process, giving you confidence that you are claiming correctly and maximising your deductions.
This approach to tax optimization ensures you are not leaving money on the table while remaining fully compliant. It provides the clarity and control you need to manage your finances effectively, turning a complex tax question into a straightforward administrative task. If you're ready to streamline your expense tracking and ensure you're claiming correctly, explore how our platform can help.
In conclusion, understanding what can influencers claim for phone and internet is a fundamental aspect of running a profitable and compliant digital business. By applying HMRC's rules on apportionment, maintaining meticulous records, and leveraging technology, you can confidently claim these essential expenses, reduce your tax liability, and focus on what you do best—creating great content.
