If you’re self-employed, claiming the right expenses is one of the simplest ways to make sure you don’t pay more tax than you need to. The rule of thumb is straightforward: an expense is allowable if it’s incurred “wholly and exclusively” for your business. Here’s how that plays out in practice.
What you can usually claim
- Office costs — stationery, phone, software and the like
- Business travel — fuel, train fares, parking and accommodation. For your own car, you can usually claim a mileage rate (currently 45p per mile for the first 10,000 business miles, then 25p)
- Premises costs — rent, utilities and business rates for your workspace
- Stock and raw materials, and direct costs of providing your service
- Staff wages, subcontractor costs and employer’s National Insurance
- Professional fees — accountancy, legal and relevant insurance
- Marketing, advertising and website costs
- A reasonable proportion of costs if you work from home
What you can’t claim
- Anything for personal, private use (or the private portion of a mixed cost)
- Client entertaining
- Fines and penalties, such as parking tickets
- Your own drawings — money you take out of the business for yourself
- The cost of everyday clothing, even if you wear it for work
Two things worth knowing
There’s a £1,000 trading allowance — if your self-employed income is below that, you may not need to report it at all. And HMRC offers “simplified expenses” (flat rates) for things like working from home and vehicle use, which can save time. Whichever route you take, keeping accurate digital records makes claiming straightforward and keeps you ready for Making Tax Digital.
Get the expenses right and you keep more of what you earn — legitimately. If you’d like a review of what you could be claiming, talk to us about (our tax services) or (our bookkeeping services).