HMRC Guidance: Claiming Business Expenses when there's Personal Use

If you are a sole trader or self-employed in a trade, getting your Self-Assessment tax return right matters.

What Trades People Need to Know

Many tools and services you use in your trade, like car or van, mobile phone, or even your home, might also be used personally. When it comes to claiming expenses, it is therefore important to separate what is for business and what is not.

What counts as a business expense?

You can claim costs that are wholly and exclusively for business. If something is used for both work and personal life, you will need to make a personal use adjustment, only claiming the business part.

Common examples include

Your car or van, mobile phone, or workspace
Costs like fuel, electricity, insurance, or internet

How does a personal use adjustment work?

Let us say you use your car 60% of the time for work and 40% for personal errands. You can claim 60% of the running costs like fuel, servicing, and insurance as a business expense.

This helps make sure your tax return is correct and avoids any issues later.

Why it matters

Making the right adjustments means

You stay compliant with HMRC rules
You reduce the risk of errors or penalties
You only pay tax on your actual business profits

Want to know more?

Visit personal use adjustments and allowable expenses for full guidance on allowable expenses and personal use adjustments.

You can also watch these short HMRC videos

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