Last updated: March 2026 • Reviewed by Compare The Networks
Three Ways to Get Business Phones
| Method | Upfront Cost | Monthly Cost | 2-Year Total | Flexibility |
|---|---|---|---|---|
| Handset Contract (Lease) | £0 | £45/mo | £1,080 | Locked 24 months |
| Buy New + SIM Only | £799 | £10/mo | £1,039 | Switch anytime Most Flexible |
| Buy Refurbished + SIM Only | £450 | £10/mo | £690 | Switch anytime Cheapest |
Based on iPhone 16 with unlimited data. Prices exclude VAT. SIM only at £10/month on Three.
Fleet Cost Comparison (10 Phones)
| Method | 2-Year Total (10 Lines) | Saving vs Contract |
|---|---|---|
| 10x Handset Contracts | £10,800 | — |
| 10x Buy New + SIM Only | £10,390 | £410 |
| 10x Buy Refurbished + SIM Only | £6,900 | £3,900 36% Saving |
For a fleet of 10, buying refurbished phones saves nearly £4,000 over two years.
Find the Best Option for Your Business
We’ll compare contract, outright, and refurbished options for your exact requirements. Free, no-obligation advice.
Get Your ComparisonWhen to Choose a Handset Contract
- No upfront budget — you cannot or prefer not to spend £500-800 per device upfront
- Simplicity — one monthly payment covers phone + plan, one invoice to manage
- Latest phones — you want the newest device and will upgrade every 2 years
- Insurance included — some contracts include device insurance
- Multi-line management — easier fleet administration on a single contract
When to Buy Outright
- Lower total cost — buying outright + SIM only is cheaper over 2 years
- Maximum flexibility — switch networks, change plans, or cancel anytime with 30-day SIM only
- No credit check on SIM — SIM only deals don’t require credit checks
- Refurbished option — save 30-50% with Grade A refurbished phones
- Capital expense — claim the full device cost through Annual Investment Allowance
Tax Treatment
| Method | Tax Treatment | VAT Reclaim |
|---|---|---|
| Handset Contract | Monthly revenue expense | Yes (on each invoice) |
| Buy Outright | Capital expense (AIA) | Yes (on purchase) |
| SIM Only | Monthly revenue expense | Yes (on each invoice) |
Both methods are fully tax-deductible for business-only phones. Read our full guide: How to Claim Your Business Mobile as a Tax Expense
Is it cheaper to lease or buy business phones?
Buying outright + SIM only is cheapest. Refurbished + SIM only saves up to 36% vs handset contracts. However, contracts avoid upfront costs and simplify management.
Can I claim a business phone as a tax expense?
Yes. Contracts are monthly revenue expenses. Outright purchases are capital expenses (AIA). Both allow VAT reclaim. The full cost is deductible for business-only phones.
What are the advantages of a handset contract?
No upfront cost, predictable monthly payments, included warranty, latest phones every 24 months, and simpler multi-line management.
What are the advantages of buying outright?
Lower total cost, maximum flexibility (switch anytime), no credit check on SIM only, and the option to use refurbished phones for even greater savings.