What Does Duality of Purpose Mean?
When you are self-employed, claiming business expenses reduces your tax bill. In many cases, most of the things you buy as part of doing business will be tax allowable. This is because if it wasn’t for working for yourself you wouldn’t have purchased them. For example, a business email subscription or website hosting. In some cases, there may be things you use both personally and for your business. Or there may be other things that you use for work and would like to deduct such as clothing.
Duality of purpose is a term HMRC uses and it relates to expenses for both business and personally. Where an expense is used for both business and personal reasons, it is difficult to distinguish a split of usage. Therefore, the whole expense would be deemed disallowable.
Where a clear portion of the expense can be proved as relating to business, then an apportionment of the expense can be made and an amount claimed as an allowable business expense., like a laptop. Where a clear apportionment cannot be made then it is unlikely the expense can be claimed such as a spotify subscription.
Examples of Duality of Purpose
Penny wears contact lenses to help correct her sight. Since she wears them all the time, including outside of work, she would be unable to claim for the cost of her contact lenses, eye test or glasses against her taxes due to duality of purpose.
Carlos is a freelancer and uses a laptop he owns personally for work reasons. Carlos is able to clearly apportion the use of between business and personal time so can claim a portion of the laptop against his taxes.
Eddie goes on a business trip combining it with his family holiday. The travel costs of his business trip cannot be claimed as an expense on his tax return as this is now a dual-purpose trip.