Are business mobile contracts cheaper than personal contracts?

How do corporate mobile contracts differ from consumer contracts?

A consumer contract is between a network or retailer and one person. A corporate contract is between the provider and the business, covering every line on one account. That single difference changes almost everything else.

The 14-day right to cancel is a consumer right. It comes from the Consumer Contracts Regulations, which protect people buying for personal use. A business signing a mobile contract doesn't get it, so read the terms before you sign, not after.

Credit checks work differently. A business contract is checked against the company's credit record. A new limited company with little trading history may be offered fewer lines at first, or asked for a deposit or a director's guarantee.

Where does the saving actually come from?

VAT. Business tariffs are quoted without VAT. If you're VAT-registered, you can normally reclaim the VAT on line rental in full, and VAT on calls either in full (where private use is banned) or by a fair split (where it's allowed), according to HMRC's VAT Input Tax manual (VIT43940). On a personal contract in an employee's name, none of that VAT is recoverable. On a £24 monthly tariff, that's £4 a month per line you never get back.

Tax and National Insurance. HMRC exempts one mobile phone per employee from tax and National Insurance, as long as the contract is between the employer and the supplier. If the employee holds the contract and the business pays the bill or reimburses the tariff, the payment is taxable: reimbursements go through payroll with PAYE and Class 1 National Insurance, and bills paid directly go on a P11D (GOV.UK, Expenses and benefits: mobile phones). Employer National Insurance is 15%, so every £100 of reimbursed phone bills costs the business about £115.

Sharing and control. On one business account, you can match each person to what they actually use, share data where the tariff allows it, cap spending outside the bundle, and cancel lines when people leave. With ten separate personal contracts, you pay for ten bundles whether or not they're used, and you can't see any of them.

Handsets. Some business tariffs include a hardware fund towards handsets, or let you buy phones outright and pair them with SIM-only lines. Either way, the business owns and controls the devices.

Which Ofcom protections apply to business customers?

Ofcom's General Conditions protect business customers too, but the smallest businesses get the most. According to Ofcom's guide to the General Conditions for business customers, the rules split like this.

All business customers: - The provider must offer at least one 12-month contract for each service. - One month's notice of any change to the contract that isn't to your benefit, with the option to leave without a penalty. - Accurate billing, and proportionate steps on late payment or disconnection. - Switching and number porting protections, with no direct charge for porting your numbers, and extra mobile switching protections for accounts with fewer than 25 numbers.

Businesses with ten or fewer employees, and not-for-profits, also get: - A one-page contract summary before you sign. - A maximum commitment period of 24 months. - A notification when an allowance in your tariff is used up, plus roaming notifications. - Minimum standards for handling complaints, and access to an Ofcom-approved alternative dispute resolution (ombudsman) scheme. - Protection from inflation-linked price rises: since 17 January 2025, any price rise written into the contract must be set out in pounds and pence (Ofcom, Prohibiting inflation-linked price rises, July 2024).

What this means in practice: once you're past ten staff, more depends on the contract itself. Check the commitment period, the early termination charges, how price rises work, and whether new lines added mid-contract end on the same date as the rest (co-terminus), so you're not locked in on different dates.

Worked example: 10 staff on personal contracts vs one business account

This is an illustration with round figures, not a quote. Tariffs vary by network, handset and usage.

Example: a 10-person firm reimburses each member of staff for a personal SIM-only contract at £24 a month including VAT. The alternative is 10 lines on one business account at £20 a month each, excluding VAT, with the same allowances.

The business account saves £76 a month, about £910 a year (28%), before any savings from capping spend or cancelling unused lines. That 28% comes from the tax treatment of business versus personal contracts, so it isn't the same as our typical saving: when a business moves its existing business contracts to Indigo, we typically save about 20% over the life of the contract. The employees are better off too: on the reimbursed contracts, they also pay income tax and National Insurance on the reimbursements.

When is a personal contract the better choice?

A business contract isn't always cheaper. If you're a sole trader who isn't VAT-registered, with one phone that you mostly use personally, a consumer SIM-only deal can cost less, and you keep the 14-day cancellation right. The VAT saving disappears if you can't reclaim VAT, and with no employees, the tax exemption for employer-provided phones doesn't come into it.

Once there's a second phone, a member of staff, or a number customers rely on, the business contract usually wins. Ask yourself what happens to the number if that person leaves. On a personal contract, the number, and every customer who saved it, goes with them.

How Indigo does this. Indigo Unified Communications' mobile team, led by Sales Director Nicola Armstrong from our Glasgow office, puts every line in the business's name on EE, O2 or Vodafone, sets spend caps at zero and reviews the account at the desk throughout the contract. We're a leading plan.com partner in Scotland, and plan.com's my.plan app lets us manage usage, caps and restrictions for each user. Business mobiles →

What to do next

1. List every phone the business pays for, including any personal contracts you reimburse, with the monthly cost of each.
2. Check whether you're VAT-registered and how reimbursements go through payroll today.
3. Note each contract's end date, so you don't pay early termination charges when you move lines.
4. Send us a recent bill for a free business mobile bill review. We'll come back within 2 working days with a side-by-side comparison.