The essential guide to phone and internet expenses for video professionals
As a video production contractor, your phone and internet aren't just communication tools—they're essential business assets. From client calls and email correspondence to uploading large video files and researching equipment, these expenses form a significant part of your operational costs. Understanding exactly what you can claim for phone and internet expenses could save you hundreds, if not thousands, of pounds annually through reduced tax bills. Many contractors miss out on legitimate claims due to uncertainty about HMRC's rules, particularly around mixed personal and business use.
The fundamental question every video production contractor should ask is: what can video production contractors claim for phone and internet? The answer lies in accurately distinguishing between business and personal use, maintaining proper records, and understanding the specific allowances available. With HMRC increasingly scrutinising self-assessment returns, getting this right is both a financial opportunity and a compliance necessity.
Modern tax planning platforms have transformed how contractors manage these claims, automating calculations and ensuring you claim every penny you're entitled to while staying within HMRC guidelines. This guide will walk you through the specific rules, calculations, and strategies to optimise your tax position.
Understanding HMRC's rules for phone and internet expenses
HMRC allows sole traders and limited company directors to claim expenses that are "wholly and exclusively" for business purposes. For video production contractors, this includes phone calls, internet usage, and equipment costs directly related to your trade. The key challenge arises when these resources are used for both business and personal purposes—a common scenario for most contractors.
For sole traders, you can claim the business portion of your phone and internet bills. If you have a separate business phone line, you can claim 100% of that cost. For mixed-use contracts, you need to establish a reasonable method to apportion costs. HMRC accepts various approaches including:
- Time-based apportionment (tracking business vs personal usage hours)
- Cost-based allocation (itemising business-specific calls and data)
- Percentage estimates based on typical usage patterns
For limited company contractors, the rules differ slightly. If the company pays for your phone contract directly, this is typically treated as a business expense. However, if there's significant personal use, there may be benefit-in-kind implications. Many contractors find that using their personal phone for business and claiming back the business portion simplifies matters.
When considering what can video production contractors claim for phone and internet, it's crucial to maintain evidence of your apportionment method. HMRC may request to see your calculations, particularly for larger claims. Using dedicated tax planning software can help automate this tracking and create audit trails.
Calculating your allowable claims: practical examples
Let's examine some real-world scenarios to illustrate what can video production contractors claim for phone and internet in practice. These examples use 2024/25 tax rates and assume the contractor is a basic rate taxpayer (20% income tax).
Example 1: Mixed-use mobile phone contract
Sarah is a video editor with a £45 monthly mobile contract. She estimates 70% of her usage is business-related (client calls, email sync, cloud uploads). Her annual business claim would be: £45 × 12 months × 70% = £378. As a sole trader, this reduces her taxable profit by £378, saving £75.60 in income tax and £43.47 in Class 4 National Insurance, totalling £119.07 annually.
Example 2: Business-only broadband
James operates his video production company from a home office. He has a dedicated business broadband line costing £35 monthly. Since this is used exclusively for business (video transfers, client meetings, research), he can claim 100%: £35 × 12 = £420 annually. This saves £84 in corporation tax if he operates through a limited company.
Example 3: Equipment purchases
Maria buys a new smartphone for £600, using it 60% for business. She can claim capital allowances on the business portion: £600 × 60% = £360. Through annual investment allowance, this provides full tax relief in the year of purchase.
These examples demonstrate why understanding what can video production contractors claim for phone and internet directly impacts your bottom line. Using our tax calculator can help you model different scenarios and maximise your claims.
Documentation and record-keeping requirements
When claiming phone and internet expenses, documentation is your safety net. HMRC expects you to keep records for at least 5 years after the 31 January submission deadline of the relevant tax year. For video production contractors, this should include:
- Itemised phone bills highlighting business calls
- Broadband statements showing usage patterns
- Records of how you calculated business vs personal use
- Receipts for equipment purchases
- Diaries or logs supporting your usage estimates
For those wondering what can video production contractors claim for phone and internet without detailed records, HMRC may accept simplified flat rates under certain circumstances. However, for most contractors with significant claims, proper documentation ensures you can substantiate your position if questioned.
Modern tax planning platforms transform this administrative burden into an automated process. By connecting to your bank accounts and categorising transactions, they can track these expenses throughout the year and generate reports ready for your self-assessment submission.
Maximising your claims: advanced strategies
Beyond basic expense claims, several strategies can help video production contractors optimise their tax position regarding phone and internet costs:
Separate contracts for business and personal use
While maintaining two separate contracts involves additional administration, it simplifies your claims significantly. You can claim 100% of the business contract without apportionment concerns, and there's no benefit-in-kind issues for limited company directors.
Capital allowances on equipment
When purchasing phones, routers, or other equipment, remember to claim capital allowances. For 2024/25, the Annual Investment Allowance allows most businesses to deduct the full value of equipment purchases from profits before tax, up to £1 million.
Home office calculations
If you use your home internet for business, this can be included in your home office expense calculation. You can claim a proportion of your total household costs based on the number of rooms used for business and the time spent working.
Understanding what can video production contractors claim for phone and internet extends beyond simple bill splitting. It's about structuring your expenses in the most tax-efficient manner possible. Specialist support for contractors can help identify these opportunities.
Common pitfalls and how to avoid them
Many video production contractors unintentionally make errors when claiming phone and internet expenses. The most common mistakes include:
- Over-claiming: Being overly optimistic about business use percentages without supporting evidence
- Under-claiming: Missing legitimate business expenses due to poor record-keeping
- Inconsistent methods: Changing apportionment methods year-to-year without explanation
- Missing capital items: Forgetting to claim for equipment purchases beyond monthly bills
When determining what can video production contractors claim for phone and internet, consistency is key. Once you establish a reasonable method for apportioning costs, stick with it unless your circumstances change significantly. If you do need to change methods, document the reason for the change.
The question of what can video production contractors claim for phone and internet becomes much simpler with proper systems in place. Implementing a tax planning platform from the start of your tax year ensures accurate tracking and eliminates year-end guesswork.
Leveraging technology for expense management
Modern tax technology has revolutionised how contractors manage expenses. Rather than manually sifting through bills and estimates, tax planning software can:
- Automatically categorise phone and internet transactions
- Calculate apportionment based on your usage patterns
- Generate real-time tax savings calculations
- Store digital copies of bills and receipts
- Integrate directly with self-assessment submissions
This technological approach transforms the question of what can video production contractors claim for phone and internet from an annual headache into an ongoing, optimised process. By tracking expenses throughout the year, you get a clear picture of your tax position and can make informed decisions about your business spending.
For video production contractors specifically, whose work often involves large file transfers and significant data usage, accurately capturing these business expenses can result in substantial tax savings. The combination of understanding HMRC rules and implementing efficient tracking systems ensures you claim everything you're entitled to while maintaining full compliance.
As you consider what can video production contractors claim for phone and internet, remember that these aren't minor expenses—they're essential business costs that directly support your income generation. Properly claiming them reduces your tax burden and reflects the true cost of running your video production business.
