Guide

Self-employed expenses: what you can claim

As a sole trader or a partner in a partnership, you pay Income Tax on your profit, not on everything you are paid. Every allowable expense you claim comes off that profit. This guide explains HMRC's test for what counts, goes through each category of cost with what you can and cannot claim, sets out the simplified expenses flat rates for vehicles, working from home and living at your business premises, and shows when the £1,000 trading allowance is worth more than your actual expenses.

Last checked 9 November 2026 against GOV.UK: HMRC's guides to expenses, simplified expenses, business records and the trading allowance, the Business Income Manual on "wholly and exclusively", and the Making Tax Digital for Income Tax guidance. This is general information, not tax advice.

The rule: wholly and exclusively for the business

An expense is allowable if you paid it wholly and exclusively for the purposes of your business. The rule is in section 34 of the Income Tax (Trading and Other Income) Act 2005, and HMRC's Business Income Manual explains it: the business must be your sole purpose for the spending. If a cost also has a private purpose, it fails the test, even when there is a business reason too.

There is an important exception. Where a definite part of a cost is for the business, you can claim that part. GOV.UK's example: your mobile phone bills for the year come to £200, of which £130 is personal calls and £70 business calls, so you claim £70. The same works for a car you also use privately or a home you also work from: you claim the business share, worked out on a reasonable basis.

Expenses reduce your taxable profit pound for pound. GOV.UK's example: turnover of £40,000 and £10,000 of allowable expenses leaves £30,000 of taxable profit. Money you take out of the business for yourself (drawings) is not an expense.

If you run a limited company you are not self‑employed, even if you are its only director and employee. The company deducts its own costs before Corporation Tax; the flat rates on this page are for sole traders and partnerships only.

What you can claim, category by category

These are HMRC's categories, with the costs GOV.UK names as allowable and the ones it rules out.

• Office and premises. Phone, mobile and internet bills, postage, stationery, printing and ink, and software you use for less than 2 years or pay for by regular licence renewals. Rent for business premises, business and water rates, utility bills, property insurance, security, and repairs and maintenance. Not the private share of any of these.
• Car, van and travel. Fuel, insurance, repairs and servicing, vehicle tax, breakdown cover, parking, hire charges, train, bus, tram, air and taxi fares, hotel rooms, and meals on overnight business trips. Not travel between home and work, fines or penalty charges, or private journeys.
• Clothing. Protective clothing such as safety boots or hard hats, aprons or overalls you wear only for work, uniforms, specialist clothing that is not everyday wear, and costumes for acting or advertising. Not suits, shirts, dresses or ordinary shoes, even if you only wear them for work.
• Staff. Salaries, bonuses, pensions, benefits, agency fees, subcontractors, employer's National Insurance, and training related to the business. Not carers or domestic help such as nannies.
• Things you sell. Stock, raw materials and the direct costs of producing goods. Not goods or materials for private use, and not depreciation of equipment.
• Legal and financial. Accountants', solicitors', surveyors' and architects' fees for business reasons, professional indemnity and other business insurance, bank, overdraft and credit card charges, interest on business loans, hire purchase interest and leasing payments. Not repayments of the loan itself, fines for breaking the law, or the cost of preparing and submitting your Self Assessment return.
• Marketing. Advertising, mailshots and website costs; free samples of things you sell; and promotional items with your business name or logo, up to £50 per recipient per tax year, but not food, drink or tobacco. Usually not entertaining clients, suppliers or customers, including a lunch during a work meeting. A staff event such as an annual dinner is allowable if employees are the main attendees.
• Subscriptions. Trade or professional journals and membership of a trade body or professional organisation related to your business. Not gym membership, political donations or donations to charity.
• Training. Courses that improve skills you already use in the business, keep you up to date with your industry, or add skills the business needs, including admin. Not training to start a new business or to move into an unrelated line of work.

A customer who never pays is a cost too, but only under traditional accounting, where the invoice was already counted as income. Under cash basis you never recorded the money, so there is nothing to write off. The guide on chasing an unpaid invoice covers getting paid first.

If you buy materials or pay for travel on a customer's behalf and bill them for it, the amount on your invoice is income and the cost is your expense. Put such costs on their own lines in the UK invoice generator, so your income records show what you recharged.

Equipment: an expense or a capital allowance

How you claim for things you buy and keep, such as a laptop, tools or a van, depends on your accounting method. Since the 2024/25 tax year, cash basis is the default for sole traders; you have to opt out to use traditional accounting.

• Cash basis: claim equipment, machinery and vans as allowable expenses in the year you pay for them. The exception is a car: it goes through capital allowances, or you claim its business miles at the flat rate instead.
• Traditional accounting: claim equipment, machinery and vehicles through capital allowances. Software goes the same way, unless you use it for less than 2 years or pay for it by regular licence renewals.

Either way, you can use only one method for a vehicle: once you have claimed capital allowances or expenses on it, you cannot switch that vehicle to the mileage flat rate.

Simplified expenses: the flat rates

Simplified expenses let you use HMRC's flat rates for three kinds of cost instead of working out the business share of your actual bills. They are optional, and you can use them for one thing and actual costs for another.

• Who can use them: sole traders, and partnerships that have no companies as partners. Limited companies cannot.
• What they cover: some vehicles, working from home, and living at your business premises. Every other expense is still worked out at actual cost.
• How: keep a record of your business miles, the hours you work at home and how many people live at your premises; at the end of the tax year apply the rates; include the totals in the expenses on your Self Assessment return.

GOV.UK's simplified expenses checker compares the flat rates with your actual costs.

Vehicles

For cars, vans and motorcycles you can claim a rate per business mile instead of fuel, insurance, repairs, servicing and the cost of buying the vehicle. For 2026/27 it is 55p a mile for the first 10,000 miles in a car or van (45p before 6 April 2026), 25p a mile after that, and 24p for motorcycles. GOV.UK's example: 11,000 business miles gives 10,000 at 55p, £5,500, plus 1,000 at 25p, £250, a claim of £5,750. You can still claim parking and other travel such as train fares on top. Cars built for commercial use, such as black cabs and dual‑control driving school cars, are excluded, and once you use the flat rate for a vehicle you keep using it for as long as that vehicle is in the business.

The mileage allowance guide has the full rate table, what counts as a business journey, the mileage log HMRC expects, and how the rate compares with actual costs.

Working from home

If you work at least 25 hours a month from home, you can claim a flat monthly amount instead of working out the business share of your heating, electricity and other household bills.

GOV.UK's example: 40 hours a month at home for 10 months and 60 hours in each of the other 2 gives 10 × £10 plus 2 × £18, a claim of £136 for the year. The flat rate does not include phone or internet; claim the business share of those bills at actual cost on top.

The alternative is to claim a share of your actual costs: heating, electricity, Council Tax, mortgage interest or rent, and internet and phone use, divided on a reasonable basis such as the number of rooms you use for work or the time you spend working there. GOV.UK's example: a home with 4 rooms, one used only as an office, and an electricity bill of £1,120 for the year gives £280; if you work there only one day a week, that becomes £40.

For someone who works at home full time, the flat rate tops out at £26 × 12 = £312 a year. With a room used only as an office in a 5‑room home, and heating, electricity and Council Tax of £3,000 a year shared equally across the rooms, the room method gives £600, so it is worth doing the sum before choosing.

Living at your business premises

A small number of businesses, such as a guesthouse, bed and breakfast or small care home, are also the owner's home. Instead of splitting each bill, you add up all the premises costs and take off a flat amount for private use, based on how many people live there.

GOV.UK's example: a couple run a bed and breakfast and live there all year, with premises costs of £15,000. They take off 12 × £500 = £6,000 and claim £9,000. If their child comes home from university for 3 months, those months use the rate for 3 people: 9 × £500 plus 3 × £650 is £6,450, leaving £8,550 to claim.

The £1,000 trading allowance instead

The trading allowance is a tax exemption of up to £1,000 a year on trading income. You use it instead of your expenses, never as well as them: if you claim the allowance, you cannot deduct any expenses or capital allowances.

• If your gross trading income for the tax year is £1,000 or less, it is all tax free and you may not need to tell HMRC at all. You still have to keep a record of the income.
• If it is more than £1,000, you can deduct £1,000 instead of your expenses. You must register for Self Assessment by 5 October after the end of the tax year.
• It does not apply to your share of a partnership's income, or to income from your employer, your spouse's or civil partner's employer, or a company or partnership that you or someone connected to you controls.

The choice is simple arithmetic. Suppose your gross trading income is £3,000. With £400 of expenses, the allowance leaves £2,000 taxable against £2,600 with your expenses, so the allowance wins. With £1,400 of expenses, your expenses leave £1,600 taxable against £2,000 with the allowance, so expenses win. If your expenses are more than your income and you want to claim the loss, you have to use expenses and file a return.

Records and how you claim

You claim by entering your allowable expenses on your Self Assessment return for the tax year. You do not send receipts with the return, but you must keep records that prove each cost in case HMRC asks: receipts, bank statements, invoices you received, and your mileage and home‑working logs if you use the flat rates. Your sales invoices are part of the same records: GOV.UK lists them among the proof to keep.

Keep them for at least 5 years after the 31 January filing deadline for the year. GOV.UK's example: a 2022/23 return sent online by 31 January 2024 means keeping the records until at least the end of January 2029. On the same rule, the 2025/26 return due by 31 January 2027 means keeping its records until at least the end of January 2032.

Making Tax Digital for Income Tax changes how you send the figures, not which expenses are allowable. You must use it if you are a sole trader or landlord and your qualifying income, which is your self‑employment and property income before expenses, was over the threshold: over £50,000 in 2024/25 means using it from 6 April 2026, over £30,000 in 2025/26 from 6 April 2027, and over £20,000 in 2026/27 from 6 April 2028. Partnerships come later. Either way, keep your expense records as you go rather than at the year end.

Sources

• Expenses if you're self-employed, GOV.UK, all eleven parts: allowable categories, the phone and working from home examples, capital allowances, bad debts, promotional items and entertainment.
• Simplified expenses if you're self-employed, GOV.UK: who can use them, the vehicle, working from home and business premises rates and their examples.
• Tax-free allowances on property and trading income, GOV.UK: the £1,000 trading allowance, full and partial relief, who cannot use it, and the records to keep.
• Business records if you're self-employed, GOV.UK: cash basis as the default from 2024/25, what to keep and for how long.
• BIM37007: Wholly and exclusively: overview, HMRC Business Income Manual: the sole purpose test, dual purpose and apportionment.
• Find out if and when you need to use Making Tax Digital for Income Tax, GOV.UK (updated 26 March 2026): the £50,000, £30,000 and £20,000 thresholds and start dates.
• Work out your qualifying income for Making Tax Digital for Income Tax, GOV.UK (updated 11 September 2026): qualifying income is turnover before expenses.