What Expenses Can You Claim If You’re Self-Employed?
If you are self-employed in the UK, you can deduct certain allowable business expenses to reduce your taxable profit. This guide explains what usually counts, what does not, how simplified expenses work, and how to keep records that satisfy HMRC.
- Is the cost wholly and exclusively for your business
- Do you have a receipt or bank record
- For mixed use, have you applied a reasonable business proportion
- Have you considered HMRC simplified expenses for home and vehicles
What are allowable business expenses
Allowable expenses are costs that are incurred wholly and exclusively for running your trade. You subtract them from your income to arrive at your taxable profit. If a cost has both business and personal use, you can usually claim the business portion only.
Common self-employed expenses you can claim
- Office costs - stationery, postage, printer ink, software subscriptions, cloud storage
- Business premises - rent, utilities, business rates, property insurance, security
- Working from home - a fair share of rent, mortgage interest is not allowable for sole traders, council tax, utilities, broadband, or use HMRC flat rate
- Phone and internet - claim the business share of mobile and broadband
- Travel for business - fuel, parking, public transport, hotels, subsistence when away from your normal base. Commuting from home to a regular workplace is not allowable
- Vehicle costs - either actual costs apportioned for business use, or HMRC mileage rate (currently 45p per mile for the first 10,000 business miles, then 25p per mile)
- Stock and materials - items bought for resale, raw materials, packaging
- Marketing - website costs, ads, flyers, sponsorship, branding
- Professional fees and insurance - accountant, solicitor, indemnity insurance, public liability
- Training - courses that update or improve skills you already use in the business
- Bank charges and interest - business account fees, interest on business loans or overdrafts
- Subscriptions - trade bodies and professional memberships that relate to your work
At a glance: claimable vs not claimable
| Expense | Claimable | Notes |
|---|---|---|
| Work clothing | Sometimes | Protective or branded clothing only. Everyday clothes are not allowable |
| Meals | Sometimes | Allowable when travelling on business or at temporary workplaces |
| Entertaining clients | No | Client entertainment and most business gifts are not allowable |
| Fines and penalties | No | Parking fines, speeding fines, HMRC penalties are not allowable |
| Training for a new trade | No | Starting a new business or new qualification is capital in nature |
| Home office costs | Yes | Use a fair proportion or the HMRC flat rate |
| Mileage | Yes | Use HMRC approved rates or actual costs proportion |
Simplified expenses - flat rates you can use
If you are a sole trader or in a partnership with no corporate members, you can use simplified expenses for:
- Working from home - claim a monthly flat rate based on hours worked at home
- Vehicles - claim mileage at HMRC rates rather than actual running costs
- Living at your business premises - fixed deduction for private use
Flat rates reduce record keeping and are often best if personal and business use are mixed. If your actual costs are clearly higher, calculate both and choose the better result.
Worked examples
1. Mileage method
- 6,000 business miles in the tax year
- Claim 6,000 x 45p = £2,700
- You cannot then claim fuel, insurance, servicing as well
2. Home office proportion
- 5 rooms used equally, you use one room for business 40 hours per week
- Annual eligible household costs total £3,000
- Fair proportion could be roughly 1 room out of 5 = 20 percent, then consider time used. A reasoned business share might be £3,000 x 20 percent x time factor
- Alternatively use HMRC flat rate based on hours worked at home per month
What you cannot claim
- Your own salary or drawings as a sole trader
- Everyday clothing that is not protective or branded
- Non business travel or commuting to a permanent workplace
- Client entertainment, most business gifts, and fines
- Training that prepares you for a new trade you do not yet carry on
Keeping records that HMRC will accept
Keep receipts, invoices, mileage logs, bank statements, and notes showing how you worked out any apportionment. Store records for 5 years after the 31 January deadline for the relevant tax year. Software such as QuickBooks, FreeAgent, or Pandle can make this simpler.
Useful links
- HMRC - expenses if you are self-employed
- HMRC - simplified expenses checker
- How to track side income and expenses
Frequently asked questions
Can I claim food as a self-employed expense
Only when you are travelling on business or at a temporary workplace and the meal is reasonable. Everyday meals at home or your regular base are not allowable.
Do I need a separate business bank account
Not legally required for sole traders, but strongly recommended. It makes record keeping cleaner and helps evidence your claims.
Should I use mileage or actual vehicle costs
Choose the method that gives a fairer result and stick with it for that vehicle. Mileage is simpler. Actual costs can be better if you have high business use and expensive running costs.
Can I claim part of my rent or mortgage
You can claim a fair proportion of rent and household running costs. Mortgage interest is not an allowable expense for sole traders, but you can include a share of heat, light, council tax, and broadband. Be careful not to claim for private use.
What if I am unsure whether an expense is allowable
Apply the wholly and exclusively test, document your reasoning, and check HMRC guidance. When in doubt, speak with an accountant.
Final thoughts
Claiming the right expenses keeps more profit in your pocket and reduces tax legally. Be consistent, keep evidence, and use simplified expenses where they save time. For edge cases, review HMRC guidance or get professional advice.