HMRC has told the ICAEW that the digital campaign follows a trial in 2024.
This trial generated over £27 million in tax revenue and ‘highlighted reporting of disallowable private use in business expenditure’.
HMRC says that it will be opening more enquiries to check that sole traders, partners and landlords only claim deductions for business-related expenses. This includes ensuring that mixed use expenses are apportioned correctly between business and personal use, which considers the circumstance of the particular tax year.
The legislation states that in order for an expense to be deductible, it must be ‘incurred wholly and exclusively for the purposes of the trade’.
Where an identifiable part of an expense is incurred for trade purposes, that part of the expense is an allowable deduction. It is important that the method of apportionment used is:
• supported by records (eg, mileage records); and
• applied consistently from one tax year to the next.
It must also be the case that the expense is not capital in nature. Capital allowances are available for qualifying expenditure on plant and machinery.
Taxpayers have the option to use flat rate ‘simplified expenses’ to work out allowable expenses on motor costs, use of home and private use of business premises.
READ MORE
27/08/2025
View all >
09/07/2026
Tax gap up to more than £59 billion
The tax gap rose to a record high of £59.2 billion in cash terms for 2024/25, according to the latest data from HMRC.
Gen Zs wish they had learnt tax basics
Four in ten of Generation Z say they wish they had learnt the basics about tax when they were younger, according to data from HMRC.
Brexit burden must be cut, says BCC
The UK government must set out a clear plan to ease the burdens that Brexit has placed on business, says the British Chambers of Commerce (BCC).
Sign up to keep in touch to receive our latest news and industry updates.
* *
Yes, I would like to receive email updates providing me with the latest finance news, advice guides and details of future events.