Although you cannot claim a deduction against business profits for private expenditure, if costs are incurred for both business and private purposes, you can claim a deduction for the business proportion. This situation may arise where a person uses his or her car, computer or mobile phone for both business and private purposes.
The costs must be apportioned between the business and private elements on a just and reasonable basis.
Example:
Mark is a sole trader. He has a mobile phone that he uses both for business and private calls. He prepares accounts to 31 March each year.
In the year to 31 March 2013, his mobile phone bills came to £1,200. 90% of his calls are for business and the remaining 10% are personal.
Mark is able to claim a deduction of £1,080 (£1,200 @ 90%) when computing his taxable profit.
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