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HMRC internal manual

Enquiry Manual

Recalculating Profits: Private Expenditure: Taxpayer's Spending - Basics

Building up a picture of all of a taxpayer’s spending is a painstaking process involving a huge number of individual items. There is a certain core of expenditure which is common to everyone in categories such as

  • accommodation
  • food
  • personal needs

Your problem is to establish the extent of such expenditure and also the taxpayer’s spending on discretionary items - the things not needed to house, feed and clothe himself or herself and family.

There is a detailed aide-memoire on SEES that will help you cover most foreseeable aspects of private expenditure. The programme contains a calculator to convert regular payments into annual amounts.

You should use the aide-memoire with the taxpayer’s individual circumstances in mind. This will normally be at a meeting EM3655. The template should not be given out like a questionnaire for the taxpayer to fill in.

If you approach the exercise by looking first at ‘essential’ spending and then at ‘optional’ expenditure you will need to have regard to the taxpayer’s apparent life style. As people become more wealthy the definition of what is ‘essential’ expenditure will change. The list below covers most of the basics. The next page refers to optional spending.


  • rent or mortgage
  • water services
  • council tax
  • gas (mains or bottled)
  • electricity
  • solid fuel (for central heating or open fires) or central heating oil
  • insurance - structural, contents
  • repairs and redecoration (including extensions, new kitchen, bathroom or bedroom, central heating, double glazing, conservatory)
  • furniture
  • electrical equipment: kitchen (cooker, fridge, freezer, dishwasher, washing machine, tumble-dryer, microwave, water softener etc)
  • electrical equipment: general (vacuum cleaner, iron, lighting etc)
  • crockery, cutlery, glassware
  • ornaments
  • carpets
  • curtains, blinds
  • bedding
  • domestic help, window cleaner etc.
  • luxury items (sauna, solarium, billiard room etc).


  • equipment (tools, pots, lawnmower, raker etc)
  • repairs and improvements (fencing, drive, patio, swimming pool, tennis court, barbecue, shed, greenhouse)
  • garden furniture
  • trees, shrubs, plants, seeds, bulbs
  • garden help


  • shopping
  • eating out
  • take-away meals
  • meals at work
  • drink and entertaining
  • confectionery


  • clothing (work and leisure)
  • cosmetics, toiletries etc
  • cigarettes and tobacco
  • private health insurance or payments, including glasses
  • NHS payments (prescriptions and dentist)
  • NIC
  • Income Tax (This content has been withheld because of exemptions in the Freedom of Information Act 2000)
  • jewellery (including watches)
  • presents
  • life insurance
  • newspapers and magazines
  • hairdressing, manicure, pedicure
  • donations to charity/church