Self-employed expenses: what you can and can't claim

Every allowable expense lowers your profit, and so your tax bill. At the basic rate, each £100 of expenses saves you about £26 in tax and National Insurance.

The basic rule

You can claim costs that are wholly and exclusively for your business. If something is used for both business and personal life, you can usually claim the business share.

What you can usually claim

• Office costs: stationery, printing, postage, software subscriptions
• Phone and internet: the business-use share
• Travel: train fares, parking and business mileage (but not your normal commute to a permanent workplace)
• Equipment: laptops, tools and machinery, usually claimed through capital allowances
• Stock and materials: things you buy to sell or use in your products
• Professional costs: accountant fees, insurance, trade body memberships
• Marketing: website hosting, advertising, platform fees
• Training that updates skills for your current business

What you can't claim

• Everyday clothes, even if you wear them for work (uniforms and protective clothing are fine)
• Entertaining clients
• Fines and penalties
• The personal share of anything you also use privately

Working from home

You have two options. Either work out the business share of your actual bills, or use HMRC's simplified flat rate, which is based on how many hours a month you work at home. The flat rate is less work and needs no bills.

Cars and mileage

Most sole traders use simplified mileage: 45p a mile for the first 10,000 business miles in a year and 25p after that. You can't then also claim fuel or repairs for that vehicle.

The £1,000 trading allowance

If your expenses are small, you can deduct a flat £1,000 instead of your actual costs. You can't do both. Use whichever gives the bigger deduction.

General guidance, not tax advice. See GOV.UK's "Expenses if you're self-employed" for the full list.