12 Nov Which Expenses Can and Cannot Be Claimed by Self‑Employed (Under HMRC Rules)

Posted at 13:02h in Individuals by

 

If you’re self‑employed (sole trader or in partnership), you can deduct certain “allowable expenses” to reduce your taxable profit — as long as those costs are wholly and exclusively for your business.

Allowable expenses are the everyday running costs of your business that HMRC lets you deduct from your income before calculating how much tax you owe.

What You Can Claim as Business Expenses

Here are common types of expenses HMRC allows — as long as they’re genuinely for business use:

  • Office costs:
    Stationery, postage, printing, internet and phone bills, rent for office space, utility bills for business premises
    (If you work from home, only the business-use portion is allowed)
  • Travel costs:
    Fuel, parking, train and bus fares, business trip accommodation, meals during overnight stays
    (Daily commuting between home and work is not allowed)
  • Vehicle costs:
    Insurance, repairs, servicing, road tax
    (Can use flat-rate mileage instead — 45p per mile for cars/vans up to 10,000 miles)
  • Staff costs:
    Salaries, pensions, bonuses, freelance contractors, agency workers
  • Stock and materials:
    Items bought to resell, raw materials, production costs
  • Marketing & advertising:
    Website costs, online ads, flyers, social media promotions, business cards
  • Legal and financial costs:
    Accountant fees, business insurance, bank charges, interest on business loans.
  • Subscriptions:
    Memberships to professional bodies, trade publications.
    (Only if relevant to your business)
  • Training:
    Courses that help you maintain or improve existing skills.
    (Not new skills for a new career)
  • Software and equipment:
    Software licences used less than 2 years, business tools, laptops.
    (May be claimed as capital allowances in some cases)
  • Working from home (simplified method):
    Use flat-rate HMRC allowances based on hours worked from home per month.

 

What You Cannot Claim

Some costs might feel business-related, but HMRC does not accept them as allowable expenses:

  • Commuting between home and your usual workplace
  • Personal expenses (meals at home, groceries, leisure travel)
  • Fines and penalties (e.g. parking tickets, late tax payments)
  • Everyday clothing — even if you wear it for work
  • Training for a completely new career or trade
  • Depreciation of equipment (use capital allowances instead)
  • Childcare or domestic help (unless strictly business-related)

 

Tips to Stay Compliant

  • Always keep records and receipts — HMRC can ask for proof.
  • Only claim the business-use portion if something is used personally too (e.g. phone, car, home internet).
  • Use flat-rate expenses where helpful (like mileage or home office)
  • If unsure, check the official HMRC guide

 

How We Can Help

As a professional accounting firm, we help self-employed individuals:

  • Understand exactly which expenses are tax-deductible.
  • Prepare accurate and compliant Self-Assessment tax returns.
  • Keep books and records that meet HMRC standards.
  • Choose between flat-rate vs actual cost methods.
  • Save time, avoid mistakes, and potentially reduce tax bills.

 

Need advice or an initial consultation? Just get in touch — Taxnet Financial Services Limited here to help.

Based on official HMRC guidance: https://www.gov.uk/expenses-if-youre-self-employed

 

Tags:
Print page