EIM32940 | Other expenses: telephone charges: treatment prior to 6 April 2026

For the treatment of telephone charges from 6 April 2026 onwards, please see EIM32935.

Section 336 ITEPA 2003

From 6 April 2006 to 5 April 2026

Where an employee necessarily bears the cost of telephone calls made in the performance of his or her duties, a deduction under section 336 ITEPA 2003 should be permitted for the actual cost of such calls, see example EIM32950.

As regards cases where the telephone rental package requires the payment of a fixed sum to cover both the line rental and calls, see EIM32942.

Normally, no deduction should be permitted for any part of the rental or standing charge for a telephone installed at the employee's home. The case of Lucas v Cattell (48TC353) provides authority for not allowing a deduction for telephone line rental. This is because the telephone line can be used for both business and private calls and so no part of the line rental is exclusively incurred in performing the duties of the employment, see EIM31660.

Where there is a genuine business need for a second telephone line at home and that line is used exclusively for business calls, you can permit a deduction for the rental of the second line. See also EIM21615 where the employer subscribes for a telephone line at the employee’s home.

No deduction should be permitted for broadband internet access where the employee is able to use the internet for non-business purposes. If the employer provides the internet connection, see EIM21615.

For mobile phones, see EIM32945.