If you're self-employed, understanding what you can and can't claim as a business expense makes a real difference to how much tax you pay — and how much stress you feel every January.
Here's a practical look at what's typically allowable, and how to stay organised about it.
The general rule
HMRC's test is whether an expense is “wholly and exclusively” for business purposes. If something is used partly for business and partly personally — like your phone or your home — you can usually only claim the business proportion.
Common allowable expenses
- Office costs — stationery, software subscriptions, printing, postage
- Travel — fuel, parking, train or bus fares for business journeys (not your regular commute)
- Clothing — uniforms or protective clothing, but not everyday clothing even if you wear it for work
- Staff costs — salaries, subcontractor payments, employer National Insurance
- Stock and materials — goods bought for resale or used to deliver your service
- Financial costs — bank charges, interest on business loans, insurance
- Marketing — website costs, advertising, business cards
- Training — courses that maintain or update skills you already use in the business
Working from home
If you work from home, you can claim a proportion of costs like heating, electricity, and internet, based on how much of your home and time is used for business. HMRC also allows a simplified flat-rate claim based on hours worked from home each month, which avoids detailed calculations.
What you generally can't claim
- Everyday clothing
- Client entertainment
- Fines, such as parking tickets
- Personal expenses with no clear business purpose
Why records matter more than the expense itself
The expenses themselves aren't complicated — what trips people up is not keeping proper records throughout the year. Without receipts, invoices, or a clear log of business mileage, it becomes very difficult to substantiate a claim if HMRC ever asks.