UK Self-Employed Expenses: What You Can Claim and What You Cannot
Updated: 4 hours ago
Claiming the right business expenses can reduce taxable profit, but the rules are narrower than simply claiming anything paid from a business account. HMRC generally requires an expense to be incurred wholly and exclusively for the purposes of the trade. If an item has both business and private use, only the identifiable business share is normally claimable.
Quick answer: what can a self-employed person claim?
A UK sole trader can normally deduct costs that are incurred wholly and exclusively for the business when calculating taxable profit. Typical examples include business software, office costs, qualifying travel, insurance, advertising, relevant professional fees and the business share of mixed-use bills. Personal spending, owner drawings, ordinary commuting, everyday clothing and client entertainment are normally excluded. The evidence and business purpose matter as much as the receipt.
At a glance: usually allowable and normally excluded
Usually allowable: business software and subscriptions, stationery, website costs, advertising, business insurance, qualifying professional fees, stock and relevant training for an existing trade.
Claim only the business share: mobile phone, broadband, household costs, vehicle costs and equipment with private use.
Normally excluded: personal spending, owner drawings, ordinary home-to-work commuting, everyday clothing, fines and business entertainment.
Choose carefully: for eligible costs, compare actual expenditure with HMRC simplified expenses; do not claim both methods for the same cost and period.
Trading allowance: if you use the £1,000 trading allowance for a trade, you cannot also deduct actual expenses for that same trade and tax year.
This guide is for sole traders and self-employed individuals. Limited companies follow different rules because the company is a separate legal entity.
1. Office costs, phone, software and business premises
Common allowable costs can include stationery, postage, printing, business software, website hosting, business telephone charges and the business proportion of broadband or mobile bills. Rent, utilities, insurance and security for business premises may also qualify. Private use must be excluded.
2. Working from home
If you work from home, you may claim a reasonable business proportion of costs such as heating, electricity, Council Tax, mortgage interest or rent, and internet or telephone use. The calculation should be supportable, for example by considering the number of rooms used and the time spent working there.
Eligible sole traders and qualifying partnerships may instead use HMRC simplified expenses, which apply flat rates based on hours worked from home. Simplified expenses are optional and are not available to limited companies.
3. Vehicle and travel expenses
Allowable travel can include business journeys, parking, public transport and accommodation required for business travel. Ordinary travel between home and a permanent place of work is generally not allowable. A vehicle used privately and for business requires an appropriate business-use calculation.
Depending on eligibility and accounting treatment, you may use actual vehicle costs or HMRC simplified mileage rates. Keep a mileage log showing the date, business purpose, destination and distance.
4. Clothing, staff and stock
Protective clothing and uniforms required for work can qualify; ordinary everyday clothing normally does not, even if worn only for work.
Employee wages, employer National Insurance, pension contributions and relevant staff training may qualify, subject to the normal rules.
Goods bought for resale, raw materials and direct production costs are generally deductible as stock or cost-of-sales items.
Payments to the business owner are drawings, not staff wages, and are not deductible.
5. Professional fees, finance, insurance and marketing
Business insurance, advertising, professional subscriptions and many accounting or legal fees can be allowable. However, not every professional fee qualifies: costs relating to capital transactions or preparing the personal Self Assessment return itself may need different treatment. Fines and penalties for breaking the law are not deductible.
6. Training and subscriptions
Training that updates or improves skills used in an existing business may qualify. Training that prepares you to start a new trade or unrelated business usually does not. Subscriptions should be directly relevant to the trade, and donations should be reviewed separately rather than treated automatically as business expenses.
7. The £1,000 trading allowance
Individuals with trading income may be entitled to a tax-free trading allowance of up to £1,000 per tax year. If total gross trading income is £1,000 or less, a return may not be required in some cases, although exceptions apply. If income exceeds £1,000, you may generally choose either actual allowable expenses or the £1,000 allowance against income—you cannot claim both for the same trade and period.
A practical record-keeping checklist
Keep invoices, receipts, bank statements and mileage records.
Record the business purpose of each expense when it is incurred.
Use a consistent and reasonable method for mixed business/private costs.
Separate capital purchases from day-to-day revenue expenses.
Review whether simplified expenses or actual costs produce the better supportable result.
How HMRC tests whether an expense is allowable
Before claiming, ask four questions: Was the cost incurred for the trade? Is there a clear business purpose? Can any private element be separated? Do you have evidence showing the amount and reason? A receipt alone does not make a cost allowable; it proves payment, while the business purpose explains the tax treatment.
Worked examples: mixed-use and borderline costs
Home broadband: if the bill is £50 a month and a reasonable, evidenced business-use calculation is 60%, the illustrative annual claim is £360 (£50 × 12 × 60%). The private share is excluded.
Computer equipment: a laptop bought mainly for the trade may qualify, but the treatment can depend on whether cash basis or traditional accounting is used and whether there is private use. Under traditional accounting, capital allowances may be relevant rather than treating the whole purchase as an ordinary expense.
Meals: lunch bought during a normal working day is usually personal. Meals may be allowable when connected with qualifying business travel or an overnight business trip, subject to the detailed rules.
Client entertainment: taking a client to dinner may be commercially useful, but business entertainment is generally not deductible when calculating taxable profit.
Cash basis and traditional accounting
Many sole traders now use cash basis accounting by default, recording most income when received and most expenses when paid. Traditional accounting records income and expenses when invoiced or incurred and has separate rules for stock, work in progress and capital items. The method can affect timing and the treatment of equipment, losses and finance costs, so it should be identified before preparing the return.
Using cash basis does not relax the wholly-and-exclusively rule. Private expenditure remains non-deductible, and special restrictions can still apply—for example to cars, financing costs, entertaining and certain legal expenses.
Actual costs or simplified expenses?
Simplified expenses can reduce administration for eligible vehicle use, working from home and living at business premises. They do not automatically produce the lowest tax bill. Compare the flat-rate result with supportable actual costs, but do not claim both methods for the same cost and period.
Common errors that can trigger questions
Claiming the whole phone, broadband, vehicle or household bill without removing private use.
Treating normal commuting or ordinary clothing as business expenses.
Using the £1,000 trading allowance and also deducting actual expenses from the same trade.
Claiming owner drawings as wages or describing personal transfers as business costs.
Failing to keep records long enough or being unable to explain how an apportionment was calculated.
Frequently asked questions
Can I claim an expense paid from my personal bank account?
Potentially yes. The account used does not decide the tax treatment. The cost must meet the business-purpose rules and should be recorded with supporting evidence.
Can I claim VAT as part of the expense?
It depends on VAT registration and whether input VAT is recoverable. A VAT-registered business normally avoids deducting the same recoverable VAT twice.
What if I have more than one self-employed trade?
Income, expenses and the trading allowance may need to be considered across the relevant trades. Keep separate records and obtain advice where activities differ.
How long should records be kept?
For Self Assessment, HMRC generally requires records to be retained for at least five years after the 31 January submission deadline for the relevant tax year; longer periods can apply in some circumstances.
Can a self-employed person claim food and meals?
Ordinary meals during a normal working day are usually personal. Food may be allowable when it is connected with qualifying business travel or an overnight business trip, subject to HMRC's detailed rules and adequate records.
Can I claim a laptop, computer or phone?
Potentially. The item must be used for the trade, any private-use element should be excluded, and the tax treatment can depend on whether cash basis or traditional accounting applies. Cars and some capital items can require separate treatment.
Should I claim mileage or actual vehicle costs?
Eligible sole traders may be able to use HMRC simplified mileage rates instead of actual running costs. The better method depends on the facts, and you should not mix the two methods for the same vehicle and period.
How TB Accountants can help
TB Accountants supports sole traders, freelancers, landlords and owner-managed businesses with Self Assessment, bookkeeping, allowable-expense reviews, Making Tax Digital readiness and wider UK tax compliance. Our multilingual team can help organise records, identify defensible claims, explain mixed-use calculations and reduce the risk of unsupported deductions or missed reliefs.
If your circumstances involve overseas income, multiple trades, property income, VAT, capital purchases or a move from sole trader to limited company, a tailored review is particularly valuable. Contact TBA through our website form to arrange a consultation.
Important note
This article is general information, not personalised tax advice. Tax treatment depends on the facts, accounting method and current legislation. Information checked as at 22 October 2026.
