HMRC is currently contacting certain sole traders by email to reiterate the importance of adjusting business expenses for personal use.
The email explains that HMRC recently sent genuine communications (from 20 October 2025 up to and including 7 November 2025). The email also includes links to GOV.UK for more detailed information on personal use adjustments and allowable expenses.
This is an important reminder for sole traders. In general, if sole traders use something for both business and personal reasons, they can only claim allowable expenses for the business costs.
However, there are simplified arrangements available to sole traders for claiming a fixed rate deduction for certain expenses where there is a mix of business and private use. The simplified expenses regime is not available to limited companies or business partnerships involving a limited company.
Simplified flat rates can be used for working from home and for the business costs of vehicles. This method saves having to calculate the proportion of personal and business use.
The current monthly flat rates are based on the amount of business use of the home. Under simplified expenses, there are also flat rates per mile available. These rates can be used instead of working out the actual costs of buying and running your vehicle, e.g. insurance, repairs, servicing, fuel.
Whilst using the flat rates is not compulsory, once a decision is made to use the simplification for a specific vehicle this must continue to be used for a vehicle as long as that vehicle is used for business purposes.
We would be happy to help you ascertain whether using simplified expenses or claiming based on actual costs incurred is more beneficial for your business.