Self-Employment Guides UK — Tax, Business Setup, and Running Your Own Business

Self-Employed Expenses You Can Claim UK 2026 — Complete List

Full list of allowable business expenses for self-employed and sole traders in the UK. What you can claim, how to claim it, and records you need.

By PocketWise · · 5 min read

Self-employment tax and business information is based on current HMRC rules. This is not tax or accounting advice. Consider consulting a qualified accountant for your specific circumstances.

Claiming the right expenses reduces your tax bill. Here’s everything self-employed people and sole traders can claim in the UK.

How Business Expenses Work

Term Meaning
Allowable expense Cost you can deduct from income
Wholly and exclusively Must be 100% for business
Tax relief Less taxable profit = less tax

Tax Savings Example

Situation Without Claiming With £5,000 Expenses
Income £40,000 £40,000
Taxable profit £40,000 £35,000
Tax saved (20%) — £1,000

Every £100 of allowable expenses saves £20-45 in tax depending on your rate.

Office and Premises Costs

Expense Claimable Notes
Rent for business premises Yes Full amount
Utilities (business premises) Yes Full amount
Business rates Yes Full amount
Office furniture Yes Or capital allowances
Stationery Yes Paper, pens, etc.
Printing and postage Yes Business-related only
Computer equipment Yes Business use portion
Software subscriptions Yes Business tools only

Working from Home

You can claim a proportion of home costs:

Method How It Works
Simplified expenses Flat rate based on hours worked
Actual costs Calculate proportion used for business

Simplified Expenses (Flat Rate)

Hours Worked from Home Monthly Amount
25-50 hours £10
51-100 hours £18
101+ hours £26

Annual example: 101+ hours/month × 12 = £312/year

Actual Costs Method

Calculate percentage of home used for business:

Expense Total Cost Business Use (10%)
Mortgage interest/rent £12,000 £1,200
Council tax £1,800 £180
Utilities £2,400 £240
Insurance £300 £30
Total claimable £1,650

Travel Expenses

Expense Claimable Notes
Business travel (public transport) Yes Trains, buses, taxis
Business travel (own car) Yes Mileage or actual costs
Parking (business) Yes Not fines
Accommodation (business trips) Yes Reasonable cost
Subsistence (overnight trips) Yes Food when away
Congestion charges (business) Yes London, etc.

Car Expenses

Method How It Works
Simplified mileage Flat rate per mile
Actual costs Fuel, insurance, repairs, depreciation

Simplified Mileage Rates

Vehicle Type First 10,000 Miles Above 10,000 Miles
Car/van 45p 25p
Motorcycle 24p 24p
Bicycle 20p 20p

Example: 8,000 business miles × 45p = £3,600 claimable

What Counts as Business Travel

Journey Claimable?
Home to regular workplace No (commuting)
Workplace to client site Yes
Home to temporary workplace Yes (if irregular)
Business meeting travel Yes
Training course travel Yes

You cannot claim commuting from home to a regular place of work.

Staff Costs

Expense Claimable Notes
Employee salaries Yes Gross amount
Employer’s National Insurance Yes Full amount
Pension contributions (employer) Yes Into employee pensions
Subcontractor/freelancer payments Yes For business services
Recruitment costs Yes Advertising, agency fees
Staff training Yes Job-related training
Staff gifts Partially Max £50/employee/year tax-free

Marketing and Sales

Expense Claimable Notes
Advertising Yes Online, print, etc.
Website costs Yes Hosting, design, domain
Business cards Yes Design and printing
Promotional materials Yes Flyers, brochures
Trade shows Yes Exhibition stands, fees
Samples Yes Given to potential customers
PR and marketing services Yes Agency or freelancer fees

Professional Services

Expense Claimable Notes
Accountancy fees Yes Tax returns, accounts
Legal fees (business) Mostly Not for buying property
Professional subscriptions Yes Relevant to your trade
Trade body memberships Yes Industry associations
Regulatory fees Yes Licences, registrations
Consultancy fees Yes Business advice

Insurance

Expense Claimable Notes
Professional indemnity Yes Full amount
Public liability Yes Full amount
Employers’ liability Yes Required if you have staff
Business premises insurance Yes Full amount
Equipment/stock insurance Yes Business assets
Business vehicle insurance Yes Or proportion for mixed use

Not claimable: Personal insurance like life insurance or private health insurance.

Financial Costs

Expense Claimable Notes
Bank charges (business account) Yes Monthly fees, transaction costs
Interest on business loans Yes Not the capital repayment
Credit card interest (business) Yes Business purchases only
Invoice factoring costs Yes Fee charged
Bad debts Yes Invoices you can’t collect
Card processing fees Yes Stripe, PayPal, etc.

Training and Development

Expense Claimable Notes
Training courses (job-related) Yes Improving existing skills
Industry conferences Yes Seminars, workshops
Books and publications Yes Relevant to your work
Online courses Yes Business-related only

Not claimable: Training for a completely new career or qualifications that let you do something different.

What You Cannot Claim

Expense Why Not Claimable
Personal expenses Not for business
Everyday clothing Personal choice
Daily food/lunch You’d eat anyway
Fines and penalties Public policy
Client entertainment Specifically excluded
Home to work commuting Personal travel
Personal phone bill Unless you apportion
Gym membership Personal fitness
Childcare Personal expense

Mixed Use Expenses

For items with both personal and business use, claim only the business proportion.

Item Approach
Mobile phone Claim % of business calls or get business contract
Internet Claim % used for business
Computer Claim % of business use
Vehicle Claim business mileage only

Record Keeping Requirements

What to Keep

Record Retention Period
Receipts 6 years
Invoices (sales and purchases) 6 years
Bank statements 6 years
Mileage log 6 years
Contracts 6 years

Good Record Keeping

Practice Why It Matters
Digital copies Backup if originals lost
Organised by date/category Easier for tax returns
Mileage log HMRC expects details
Separate business account Clear business transactions

Simplified Expenses Summary

Category Simplified Rate
Working from home £10-£26/month
Vehicle mileage 45p/25p per mile
Living on business premises Flat rate deduction

Simplified expenses are easier but may give you less relief than actual costs. Calculate both to see which benefits you more.

Common Mistakes to Avoid

Mistake Consequence
Claiming personal expenses HMRC penalties
No receipts Expense disallowed
Claiming commuting Not allowable
Round number estimates Looks suspicious
Overclaiming Investigation risk
Missing legitimate expenses Paying too much tax

How to Claim Expenses

Self Assessment Tax Return

  1. Keep records throughout the year
  2. Calculate total expenses by category
  3. Enter on self-employment pages (SA103)
  4. Use simplified or actual costs consistently
  5. Keep records for 6 years

Using Accounting Software

Software like FreeAgent, Xero, or QuickBooks can:

  • Track expenses automatically
  • Categorise correctly
  • Calculate simplified expenses
  • Generate tax return figures

Summary

Category Examples
Office Rent, utilities, stationery, equipment
Travel Mileage, public transport, accommodation
Professional Accountant, legal, subscriptions
Marketing Advertising, website, materials
Financial Bank fees, loan interest, bad debts
Insurance Professional, liability, premises

Claiming all legitimate expenses reduces your tax bill legally. Keep good records, claim only genuine business costs, and get an accountant if you’re unsure.

Sources

  1. HMRC — Expenses if you're self-employed