Tax Guide 2025/26
What Can I Claim as a
Self-Employed Expense?
Complete guide to every allowable business expense for UK sole traders and freelancers
As a self-employed sole trader, you can deduct allowable business expenses from your income before calculating your tax. This reduces your tax bill — sometimes significantly. The golden rule: an expense must be “wholly and exclusively” for business purposes to be deductible. This guide covers every category of allowable expense you should know about.
The Golden Rule — “Wholly and Exclusively”
HMRC only allows you to claim expenses that are wholly and exclusively incurred for business purposes. If an expense has a personal element, you can only claim the business proportion. For example, if your mobile phone is used 60% for business and 40% personally, you can only claim 60% of the cost.
Keep every receipt and record
HMRC can ask you to evidence any claimed expense going back 5 years from the Self Assessment filing deadline. Use accounting software or a simple folder system to keep digital or paper copies of all business receipts and invoices.
All Allowable Expense Categories
Home Office / Business Premises
- Rent for business premises
- Business rates
- Utilities for premises
- Security and cleaning
- Portion of home costs (if working from home)
Travel & Vehicles
- Business mileage (car, van, motorcycle)
- Train, bus, taxi fares for business travel
- Parking for business trips
- Tolls and congestion charges
- Overnight accommodation for business
Equipment & Technology
- Computer, laptop, tablet (business use)
- Software subscriptions
- Printer, scanner, phone
- Office furniture and equipment
- Tools and machinery
Marketing & Advertising
- Website design and hosting
- Advertising (Google Ads, social media)
- Business cards, leaflets, brochures
- Branded clothing/workwear
- Networking event fees
Professional & Legal
- Accountancy and bookkeeping fees
- Legal fees for business matters
- Professional indemnity insurance
- Public liability insurance
- Trade/professional body memberships
Training & Development
- Courses to improve existing skills
- Industry-relevant books and subscriptions
- Conferences and seminars
- Professional journals and trade magazines
Stock & Materials
- Raw materials used in products
- Stock purchased for resale
- Packaging and postage
- Direct costs of delivering a service
Staff & Subcontractors
- Wages and salaries paid
- Employer NI contributions
- Subcontractor fees
- Pension contributions for staff
- Staff uniforms and PPE
Finance & Banking
- Business bank account fees
- Interest on business loans
- Merchant and payment processing fees
- Invoice factoring/finance charges
Office & Admin
- Stationery and office supplies
- Postage and courier costs
- Business telephone and broadband
- Printing costs
- Virtual office or registered address
Working From Home — How to Claim
If you work from home, you can claim a proportion of household running costs. There are two methods:
Simple Method
Flat Rate (Simplified Expenses)
HMRC’s simplified flat rate — no calculations needed. Just count how many hours per month you work from home.
£10–£26/month
| Hours/month | Monthly rate |
|---|---|
| 25–50 hours | £10 |
| 51–100 hours | £18 |
| 101+ hours | £26 |
Actual Cost Method
Proportional Room Cost
Calculate the actual business proportion of your home running costs. Usually gives a larger deduction but requires more record-keeping.
Formula: (business rooms ÷ total rooms) × (business hours ÷ total hours) × annual costs
✓ Often results in a higher deduction for full-time home workers
You cannot claim the mortgage capital repayment
If you own your home, you can claim a proportion of mortgage interest (not capital repayment), council tax, utilities, and buildings insurance. However, claiming a room “exclusively” for business use could affect Private Residence Relief on your CGT when you sell.
Vehicle Expenses — Mileage Allowance
The easiest way to claim vehicle costs is using HMRC’s Approved Mileage Allowance Payments (AMAP) rates. This avoids the need to track actual fuel, insurance, and maintenance costs separately:
🚗 Cars and vans — first 10,000 miles
Per business mile in the tax year
45p/mile
🚗 Cars and vans — over 10,000 miles
Per business mile above 10,000 in the tax year
25p/mile
🏍️ Motorcycles
All business miles
24p/mile
🚲 Bicycles
All business miles
20p/mile
Important: You cannot claim mileage for commuting to a regular place of work — only travel to client sites, meetings, and other genuine business trips. Keep a mileage log with dates, destinations, and business purpose.
What You CANNOT Claim
❌ Expenses NOT Allowed Against Tax
- Personal food, clothing (unless a uniform or PPE)
- Commuting from home to your regular place of work
- Entertainment of clients or customers (not allowable for tax)
- Fines and penalties (parking tickets, HMRC penalties)
- Personal phone calls (only business proportion)
- Capital purchases (claimed separately as capital allowances)
- Charitable donations (claimed separately via Gift Aid)
- Your own salary or drawings (not an expense for a sole trader)
Capital Allowances — Equipment and Assets
Large purchases like computers, machinery, and vehicles are not deducted as normal expenses. Instead, you claim Capital Allowances. The main scheme is the Annual Investment Allowance (AIA) which lets you deduct the full cost of most business assets in the year of purchase:
| Allowance | Annual Limit | Rate |
|---|---|---|
| Annual Investment Allowance (AIA) | £1,000,000 | 100% in year of purchase |
| Writing Down Allowance — Main Pool | Unlimited | 18% per year |
| Writing Down Allowance — Special Rate | Unlimited | 6% per year |
| First Year Allowance (new zero-emission vehicles) | Unlimited | 100% in year of purchase |
Frequently Asked Questions
Can I claim a laptop as a business expense?
Yes — if used for business. If it’s used partly personally, you can only claim the business proportion. A laptop bought primarily for business use can be claimed as a capital allowance under the Annual Investment Allowance (100% deduction in the year of purchase).
Can I claim business entertainment expenses?
Generally no. Client entertainment (taking clients for meals, events, etc.) is specifically not an allowable business expense even if genuinely for business purposes. Staff entertaining (a Christmas party, for example) may be partially allowable up to £150 per head per year.
Can I claim my mobile phone?
Yes — but only the business proportion. If your phone is 70% business use, you can claim 70% of the contract cost and calls. If you have a dedicated business phone used solely for work, the full cost is deductible.