HMRC is increasing its focus on taxpayers who use their business accounts to pay for personal expenses in their Self Assessment returns.
The principle has always been clear: an expense must be wholly and exclusively for your trade. What is changing is how closely these claims are examined and how quickly HMRC can identify something that does not look right.
The tax authority’s new Claiming work expenses campaign is designed to make people stop and think before including costs that might not pass the test.
It is not just a public reminder – it signals that mixed-use claims and over-generous apportionments are firmly on HMRC’s radar.
Why are expense claims being targeted now?
HMRC reports that over 12 million people file a Self Assessment return each year, and in its view, too many of those include costs that should not be claimed.
According to the tax authority, some of these claims are made deliberately, while others result from habits that have not been corrected.
HMRC says its improved data analysis now allows it to compare returns across similar businesses, spot unusual patterns, and identify expenses where a private element appears not to have been removed.
This means that errors that might have previously gone unnoticed are now far more likely to be detected and challenged.
The basic test
At the heart of the rules is the wholly and exclusively rule.
If a cost has any personal element, that part has to be excluded.
On paper, it sounds straightforward, but in real life, the lines blur – especially when the same bill covers both home and business, or when a purchase feels “useful” for work but is just as useful in your personal life. These are known as ‘dual purpose’ expenses.
Where mistakes are common
- Working from home – You can claim part of your household bills, but only the work share. HMRC’s guidance on apportioning costs covers methods like splitting by rooms or hours worked, and once you choose a method it is best to stick with it. For more details, see our guide to home office expense claims.
- Travel – Visiting clients or working at a temporary location is acceptable. Regular travel to the same office or co-working space is considered commuting and is therefore not claimable.
- Entertaining – Even if it helps win business, client entertaining is generally disallowed.
- Training – Updating skills you already use in your trade can be claimed. Training that gives you a brand-new skill or trade is usually treated as capital and not deductible. See also our guide to capital allowances for other types of capital expenditure.
- Phones and broadband – Where there is both personal and business use, you need a reasonable split and evidence to back it up. Having a separate business line avoids disputes. See our guide to phone and internet expenses.
- Equipment with dual use – If cameras, tablets, or laptops end up in family use, you can only claim the business proportion.
If you are not sure, our guide to what business expenses you can claim as a sole trader covers the main categories in plain English.
How HMRC approaches your claims
When HMRC reviews your expenses, they are not just verifying the total sum you claim on your tax return.
They compare your costs with others in your sector, look for unusual spikes from one year to the next, and examine whether a claimed expense actually matches the description.
A significant increase in home-working costs without any change to your working pattern could trigger a question. So could a high subsistence claim in a business that does not involve much travel.
Often, it is the absence of a clear calculation that raises the flag, not just the figure itself.
Examples from real life
- Streaming subscription – A designer claims a premium TV package as “research” for creative work, but the same account is used by the whole family. Without a clear, documented split between business and personal use, the claim is hard to justify.
- Mobile on a family plan – One bill covers four handsets. Claiming the full amount will not stand up; HMRC can request itemised usage and expect a fair allocation. On unlimited plans, a time-based split supported by call records is safer.
- Coffee and meals with clients – A lunch during a meeting is still considered entertaining, so it is not allowable. Your travel subsistence during a genuine business trip might be fine, but the client’s meal is not. For more information, read our guide on subsistence expenses.
- Regular workspace travel – Mileage for a weekly trip to the same co-working hub is commuting. A one-off visit to a client’s office to deliver work is different and may be allowed.
- Training bootcamp – A short refresher course to keep your skills current is more likely to be deductible. A lengthy programme to retrain for a new profession is usually capital in nature. More on capital expenditure can be found in our capital allowances guide.
- Home office – Buying a desk or office chair for business use is fine. Redecorating your living room because you sometimes work there is not. If you claim a portion of bills, follow HMRC’s apportionment guidance and keep the same method year to year, unless your work pattern changes. For more, see our guide to home office expenses.
- Clothing – Ordinary clothing, even if worn only for work, is not claimable. Protective or specialist gear with no personal use can be. See our full guide to clothing expenses for details.
- Laptop with shared use – If a laptop is used by others at home, claim only the business percentage. Keeping a monthly usage log can be enough to support your figure.
Keeping records that hold up
If you are claiming part of a cost, write down how you worked it out and keep that note with the receipt. Use the same approach every year unless your circumstances change.
HMRC’s self-employed expenses guidance lists the main categories, but your own clear, consistent method carries more weight if questioned.
If you get it wrong
Incorrect claims can mean repaying the tax plus interest.
Where HMRC believes the error was careless or deliberate, penalties may apply.
And if the same type of claim appears in earlier years, they can review those too, turning what was a minor adjustment into a much bigger problem.
Before you file
- Was the expense a genuine, purely business claim?
- If there is mixed use, have you removed the personal share and noted your calculation?
- Would your claim make sense to someone at HMRC who is reviewing it without any context beyond the invoice and your note?
When in doubt, check HMRC’s Claiming work expenses page and the wholly and exclusively rule. For an easy category-by-category refresher, see our sole trader expenses guide.