HMRC is launching a digital campaign designed to promote accurate private use adjustments of business expenses declared through Self Assessment tax returns.

For an expense to be tax-deductible, it must be incurred ‘wholly and exclusively’ for business purposes, with suitable adjustments applied where there is any private use. This means expense claims should only cover the business element, and where costs are partly for personal and business use, they should be apportioned fairly according to the circumstances of the relevant tax year.

In a 2024 trial involving 600,000 self-assessed taxpayers who were prompted to make precise private use adjustments, HMRC found widespread errors in reporting disallowable private use. As a result, HMRC now intends to increase the number of enquiries into private use adjustments made in business expense claims.