Following a pilot project in 2024, HMRC has launched a new digital campaign. The pilot generated over £27 million in additional tax revenue and revealed widespread issues with the reporting of private use costs in business expenditure.
As a result, HMRC will be expanding its enquiries into the tax affairs of sole traders, business partners, and landlords. Particular attention will be given to mixed-use expenses, where costs have both business and personal elements, to ensure they are apportioned correctly in line with the circumstances of each tax year.
HMRC is urging agents to take a proactive approach by checking the accuracy of expense claims when preparing clients’ 2024/25 returns. Where earlier submissions contain errors, agents are also expected to make the necessary corrections.
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