Phone and Internet Tax Deductions for Self-Employed UK
Claim phone, broadband, and software costs as self-employed in the UK. Split personal and business use, see what qualifies, and calculate your deduction.
Key Actions
- Review your phone and broadband bills for the tax year
- Estimate the business proportion of each bill using a reasonable method
- List all software subscriptions and digital tools used for your business
- Keep bills and a note of your calculation method as evidence
- Claim phone and internet separately if you use the simplified expenses flat rate for working from home
Self-employed people in the UK can claim phone, broadband, and internet costs as allowable tax deductions — but only the business portion of each bill. These are among the most commonly claimed expenses and also the most frequently misclaimed. If you use your phone or internet for both business and personal purposes, you need to calculate a fair split and keep evidence of how you worked it out.
This guide covers what you can claim, how to calculate the business proportion, which digital costs qualify, and the rules around software subscriptions and MTD-related tools.
What Phone and Internet Costs Can You Claim?
You can claim any phone, broadband, or internet cost that is wholly or partly for business use as a self-employed expense. The deductible amount depends on whether the cost is exclusively for business or mixed-use.
Fully deductible (100% business use):
- A separate business phone line or mobile contract used only for work
- A dedicated business broadband connection
- A business-only email or web hosting service
Partially deductible (mixed personal and business use):
- Your personal mobile phone if used for business calls, emails, and messaging
- Home broadband shared between personal and business use
- A personal phone contract that includes business data usage
Not deductible:
- The personal portion of any mixed-use bill
- Phone or broadband costs with no connection to your business
- Entertainment or personal streaming services (even if accessed on a business device)
How to Calculate the Business Proportion
When a phone or broadband bill covers both personal and business use, you need to work out a reasonable business proportion. HMRC doesn't prescribe a specific method — you choose one that reflects your actual usage.
Method 1: Usage-Based Split
Estimate the percentage of your usage that's business-related.
Example — mobile phone: Sarah is a freelance graphic designer. She reviews her phone bill and estimates that 60% of her calls, texts, and data usage are for business (client calls, project management apps, email).
- Annual mobile contract: £360
- Business proportion: 60%
- Claimable amount: £216
Example — broadband: James runs an online shop from home. He estimates 70% of his broadband usage is for business (processing orders, managing the website, supplier communications).
- Annual broadband: £480
- Business proportion: 70%
- Claimable amount: £336
Method 2: Time-Based Split
If you can't easily measure usage, estimate by the proportion of time you use the service for business.
Example: You use your broadband 10 hours per day — 6 hours for work and 4 hours for personal use.
- Business proportion: 6 ÷ 10 = 60%
- Annual broadband: £480 × 60% = £288
Method 3: Separate Business Contract
The simplest approach: get a separate phone contract or SIM for business use. If a phone is used 100% for business, the entire cost is deductible — no proportional calculation needed.
This also makes record keeping straightforward: one bill, fully claimable.
Phone and Internet with the Simplified Expenses Flat Rate
If you use the simplified expenses flat rate for working from home (£10, £18, or £26 per month depending on hours, 2025/26 tax year), phone and internet costs are not included in that flat rate.
This means you can claim your phone and broadband costs on top of the simplified flat rate. Calculate the business proportion as described above and add it to your simplified expenses claim.
Example: Emma works from home full-time and claims the £26/month flat rate (£312/year). She also has:
- Mobile phone (50% business): £25/month × 50% = £12.50/month = £150/year
- Broadband (65% business): £40/month × 65% = £26/month = £312/year
- Total phone/internet claim: £462 (on top of the £312 flat rate)
For more on working from home expenses, including how the flat rate compares to claiming actual household costs, see our dedicated guide.
Software Subscriptions and Digital Tools
Software and digital tools used for your business are allowable expenses. With Making Tax Digital launching in April 2026, many self-employed people are taking on new software costs — these are deductible.
Commonly claimed digital costs:
- Accounting software (FreeAgent, Xero, QuickBooks, Sage)
- MTD-compatible bookkeeping tools
- Cloud storage (Google Workspace, Dropbox, iCloud — business portion)
- Website hosting and domain registration
- Email marketing tools (Mailchimp, ConvertKit)
- Design or editing software (Adobe Creative Cloud, Canva Pro, Figma)
- Project management tools (Trello, Asana, Monday)
- Communication tools (Zoom, Microsoft Teams — business portion)
- CRM and invoicing software
How Software Is Treated for Tax
| Type of software | Tax treatment |
|---|---|
| Monthly/annual subscription | Allowable expense — deduct in the year you pay |
| Licence renewed regularly (even if used for 2+ years) | Allowable expense |
| One-off purchase, short lifespan (under 2 years) | Allowable expense |
| One-off purchase, long lifespan (over 2 years) | Capital allowance (or allowable expense under cash basis) |
Most modern software is subscription-based, which means it's simply claimed as an expense in the year you pay for it.
Mixed-use software: If you use software for both business and personal purposes (e.g., Adobe Creative Cloud for client work and personal photography), apply the same proportional split as phone and broadband.
What Records to Keep
HMRC doesn't ask for receipts when you file, but you need to keep evidence in case of an enquiry:
- Phone bills — monthly statements showing the total cost
- Broadband invoices — annual or monthly bills
- Software receipts — subscription confirmations or payment receipts
- Your calculation method — a note explaining how you worked out the business proportion (e.g., "60% business use based on estimated call/data split")
- Bank or credit card statements — showing the payments
Keep records for at least 5 years after the 31 January filing deadline for the relevant tax year. For more on what HMRC expects, see our record keeping guide.
Common Mistakes to Avoid
Claiming 100% of a mixed-use phone bill. If you use your personal phone for business, you can only claim the business proportion — not the full bill. HMRC can challenge claims where 100% is claimed on an obviously personal contract.
Forgetting phone and internet when using simplified expenses. The working-from-home flat rate doesn't cover phone and broadband — many people miss this and under-claim.
Not keeping a record of the calculation method. You don't need to log every call, but you do need a reasonable basis for your percentage. A brief note ("estimated 60% business use based on typical daily usage") is sufficient.
Claiming personal streaming or entertainment. Netflix, Spotify, and gaming subscriptions are personal expenses, even if accessed on a work device.
Frequently Asked Questions
Can I claim my entire phone bill if I use it for business?
Only if the phone is used exclusively for business. If it's a personal phone used partly for work, you claim the business proportion only. Getting a separate business SIM or contract is the simplest way to claim 100%.
Are software subscriptions like Xero or QuickBooks tax-deductible?
Yes. Software subscriptions used for your business — including accounting tools, MTD-compatible software, and other digital tools — are allowable expenses. Claim the full subscription cost if it's 100% for business, or the business proportion if used personally too.
Do I claim broadband under working from home or separately?
If you use the simplified flat rate for working from home (£10-£26/month, 2025/26), broadband is not included in that rate — claim it separately on top. If you use the actual costs method for working from home, broadband is included in your proportional calculation and should not be claimed twice.
How do I prove the business proportion to HMRC?
You need a reasonable method and a record of how you calculated it. This could be based on usage patterns (proportion of calls that are business), time (hours per day for work vs personal), or a combination. Keep a brief note of your method — you don't need to log every individual call.
This guide is for informational purposes only and does not constitute tax, legal, or financial advice. Tax rules change frequently. Always verify current requirements on GOV.UK or consult a qualified accountant for your specific situation.
Official Sources
- Expenses if you're self-employed - GOV.UK
- Business records if you're self-employed - GOV.UK
- Simplified expenses if you're self-employed - GOV.UK