How to split receipts and bills between business and personal use in the UK

Every sole trader eventually ends up with a mixed receipt or bill: a supermarket or Amazon order containing printer ink alongside household groceries, a single mobile phone contract used for client calls and family messages, or one car used for both site visits and the school run.

Under section 34(1) of the Income Tax (Trading and Other Income) Act 2005 (ITTOIA 2005), HMRC disallows expenses not incurred "wholly and exclusively for the purposes of the trade". Immediately beneath it, however, section 34(2) ITTOIA 2005 provides the legal bridge for mixed expenses:

If an expense is incurred for more than one purpose, a deduction is allowed for any definite part or proportion of the expense which is incurred wholly and exclusively for the purposes of the trade.

Here is how to apply that rule across the three types of mixed receipts UK sole traders face — and what must be recorded so the split stands up in an HMRC check.

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Scenario 1: A single shop receipt with both business and personal items#

Buying A4 paper, postage stamps or hand tools in the same basket as personal shopping is completely fine for Self Assessment.

How to split a mixed retail receipt#

1. Keep the entire receipt image: Never cut a paper receipt in half — cutting it often removes the store name, date, VAT number or payment total.
2. Isolate the business line items: Add up the exact prices of the items bought wholly and exclusively for your business.
3. Account for VAT accurately (if VAT-registered): Check the VAT code printed beside each line item on the receipt (supermarket receipts often mix 20% standard-rated goods like stationery with 0% zero-rated food). Reclaim input VAT only on the business items, and keep a valid VAT invoice or simplified VAT receipt (for supplies of £250 or less).

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Scenario 2: Mobile phone and home broadband contracts#

Most sole traders use a single personal mobile phone and one home broadband connection for both work and private life. These belong in Box 18 (Phone, fax, stationery and other office costs) on SA103S.

How to set a defensible business-use percentage#

• Separate business contract: If a mobile contract or second phone line is in your business name and used solely for work (with only incidental private use), 100% is allowable.
• Mixed personal and business contract: HMRC accepts a reasonable apportionment based on actual use (BIM47820). Check a representative one-to-three-month sample of your itemised bill, call history, or working hours online:
  • If roughly 60% of your phone calls and data usage are for clients, suppliers and work apps, claim 60% of the monthly contract cost.
  • If you buy extra call bundles or international roaming solely for a business trip, 100% of that specific add-on is allowable.

Once you have sampled your usage and recorded a short note explaining the split, you can apply that standing business-use percentage to each monthly bill across the tax year (updating it if your work pattern changes).

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Scenario 3: A vehicle used for both business and private journeys#

If you use one car or van for both trade journeys and private driving, you choose between two methods for Box 12 (Car, van and travel expenses):

1. Simplified expenses (mileage flat rate): You do not split fuel, insurance or servicing receipts at all. Instead, you log your business miles and multiply them by HMRC's flat rate: 45p per mile for the first 10,000 business miles in the 2025 to 2026 tax year (rising to 55p per mile from 6 April 2026), and 25p per mile per mile thereafter.
2. Actual vehicle costs (apportioned by mileage): You keep all receipts for fuel, insurance, road tax, servicing and repairs, then multiply the annual total by (Business miles ÷ Total miles driven in the tax year).

See self-employed mileage and vehicle expense records for what your mileage log needs to show.

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How to report split expenses on SA103S vs SA103F#

How you enter a split expense on your Self Assessment return depends on whether your turnover is below £90,000:

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Checklist: Keeping split-receipt records for HMRC#

• Keep the full original image: Store the complete original receipt or digital photo showing all items, the date, the merchant and the total paid.
• Mark the business items: Record which specific line items on a mixed shop receipt were claimed as business expenses.
• Note your standing percentage basis: For phone, broadband and utility bills, keep a brief note of the sample or floor-area calculation behind the business-use percentage claimed.
• Keep your mileage log: For vehicle actual costs, retain your business mileage log and start/end odometer readings for the tax year.
• Hold valid VAT evidence: For VAT claims, keep valid VAT invoices and the input-tax apportionment calculation under VAT Notice 700 for at least 5 years after 31 January.