Private use of business assets

We hear on the grapevine that the Taxman is cracking down on the claimed private use of business assets such as vehicles and telephones.

If you say your phone is used 20% for private calls, can you prove it? If not, you could be stung for extra tax for each of the last six years - not a pleasant Xmas present! We suggest you keep a sample (say two months for each year) of relevant costs to calculate what your percentage private use is.

For your vehicle, keep a mileage log of all your journeys for two months and calculate the percentage of miles travelled that are on private journeys. For your phone, go through the itemised call list and highlight the private calls so you can calculate the private cost proportion of your bill. Undertake a similar exercise with any other business assets that have an element of private use.

At least then you have some evidence to rebut the Taxman’s assertions that the private use is higher than you say it is.