HMRC Targets Personal Expenditure In Business Accounts This Tax Year
HMRC will be targeting personal expenditure in business accounts with a new digital campaign and will make more enquiries. It wants clear, consistent apportionment and strong records. You should review your accounts before submitting your tax return if needed ... HMRC targets, Personal expenditure, Inspection awaits HMRC ran a successful 2024 trial, which raised over £27m and proved that private costs can creep into business claims. The new digital campaign means more nudges, more checks, and more enquiries for sole traders, partners and landlords who blur the line between personal and business expenditure. The core rules have not changed!An expense must be incurred wholly and exclusively for it to be deductible. Where there's a clear business element within a mixed cost, that business portion can still be claimed, provided the apportionment is fair, backed by evidence and applied consistently year on year. What HMRC wants to see is simple, reliable proof. Mileage logs that reconcile to journeys, phone bills split on a sensible basis, and home office claims that reflect actual business use across the tax year. When HMRC targets personal expenditure, weak records are the first domino to fall, so contemporaneous notes and receipts matter.It also pays to remember that routine repairs to premises are generally allowable, but improvements are capital and must be excluded from revenue deductions. For plant and machinery, capital allowances may be ok, but personal use of assets such as vehicles requires a restriction so that only the business element attracts relief. Don't forget flat rates!Some taxpayers may prefer the simplified expenses route for vehicles, home working and private use of business premises. The flat rates are designed to be practical, reduce judgment calls, and lower enquiry risk when used consistently and supported by basic records. I strongly recommend you review your 2024/25 returns with fresh eyes and revisit earlier years if necessary. If a method of apportionment has drifted, or if evidence is light, tightening the approach now is wise, especially as HMRC targets personal expenditure with data-led prompts and follow-up enquiries. Typical flashpoints include motoring, phones and broadband, use of the home, mixed-purpose travel, and property-related costs. The question is not whether an item has any personal benefit, but whether the business part can be identified, measured and defended. A credible, repeatable method - explained in working papers - goes a long way. This is not about disallowing genuine business | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Would you like to know more? |
If anything I've written in my blog post resonates with you and you'd like to discover more of my thoughts about HMRC targeting personal expenditure in tax returns, then do call me on 01908 774320 and let's see how I can help you. Don't forget to stay updated with our daily social media posts on Facebook. |
Share the blog love ... | |||||||||||||||||||||||
#HMRC targets personal expenditure #SelfAssessment #TaxCompliance #SoleTraders #Landlords #BusinessExpenses |
About Roger Eddowes ... | ||
|
More blog posts for you to enjoy ... | ||
 | 2025/26 company car taxable benefits: what drivers and employers need to know What are the company car taxable benefits for 2025/26? Well, with CO2 bands, list price rules, and future rate rises, this is a clear, upbeat take on HMRC changes. Use it to plan your company cars and electric vehicles with c... | |
 | How AI can help you prepare your tax return this year AI speeds up data capture and checks, while accountants provide guardrails. Use both to prepare your tax return with fewer errors and less hassle. It's efficient, affordable, and grounded in human oversight ...... | |
 | What Reeves' pre-budget speech didn't say and what it could mean for you I'm uneasy after Reeves' pre-budget speech because tax rises are definitely on the agenda now. So what might change - from Income Tax to frozen thresholds - and why? If you've a payslip or a mortgage, or even just a weekly fo... | |
 | Why you should check simple assessments for accuracy Here's why you should check simple assessments and how to do it with confidence. Spot errors, fix them fast, and avoid overpaying. You'll know when to contact HMRC and what to do next ...... | |
 | Autumn Budget 2025: levelling the tax playing field for a fairer economy The Autumn Budget 2025 could rebalance taxes without denting pay packets. If the Chancellor implements sensible reforms, they could raise revenue, boost growth and increase overall business confidence. It's a pragmatic path t... | |
 | How the HMRC R&D tax relief tool can streamline claims Curious about the HMRC R&D tax relief tool? Here's how it clarifies eligibility, reduces risk, and supports better claims. It's a pragmatic boost for research and development ...... | |
 | Unlocking sustainable economic growth through smarter, steadier government Here's a clear path to sustainable economic growth: stable rules, simpler taxes, and targeted investment. It shows how government policy can unlock business growth. It's optimistic, practical, and focused on outcomes ...... | |
 | Do you need to file a self-assessment tax return this year? Wondering if you need to file a self-assessment tax return for 2024/25? Here's what's changed, who must file, and when to act. Stay ahead, avoid penalties, and keep things simple ...... | |
Other bloggers you may like ... | ||
 | Relocating To Milton Keynes? Short Stay : MK Can Accommodate You! Posted by Emily Freeman on https://blog.shortstay-mk.co.uk Considering Relocating To Milton Keynes? Short Stay: MK offers flexible accommodation solutions, making your transition easy while you explore your ne ... | |
 | Finding your career summit: how to identify your core values for decision making Posted by Dave Cordle on https://blog.davecordle.co.uk Imagine setting out on a mountain climb without a map or destination in mind. The path feels uncertain, the terrain unfriendly, and doubts creep in at ... | |
 | Six subtle ways small businesses waste time and how a VA fixes it Posted by Sarah Hannaford on https://blog.sarahpasolutions.co.uk Here's how small businesses waste time without even noticing, and how a Virtual Assistant fixes it. Expect calm inboxes, smoother workflows, and bette ... | |
 | 5 Challenges Consultants Face Setting Up Their Own Business Posted by Jacky Sherman on https://www.jackysherman.com I recall a fellow attendee at my first sales training course, when I was preparing for my own transition from employee to consultant. She confided in ... | |
