Allowable Expenses for Self-Employed: What You Can (and Can't) Claim
Quick Answer
You can claim expenses that are "wholly and exclusively" for business purposes. This includes things like software, travel to clients, phone bills (business portion), and professional services. Claiming all your legitimate expenses reduces your taxable profit—and therefore your tax bill.
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The Golden Rule: Wholly and Exclusively
HMRC allows you to deduct expenses that are "wholly and exclusively" for business purposes.
This doesn't mean you can't claim things you also use personally. It means you need to work out the business portion and only claim that.
Example: Your phone bill is £50/month. You estimate 60% is for business calls and messages. You can claim £30/month.
Common Allowable Expense Categories
Office & Workspace
| Expense | Notes |
|---|---|
| Rent (business portion) | If you rent a studio/office, or work from home |
| Utilities | Gas, electric, water – business portion only |
| Internet | Essential for most self-employed work |
| Office supplies | Pens, paper, printer ink, desk accessories |
For home office claims, see our separate guide on home office and mileage deductions.
Equipment & Tools
| Expense | Notes |
|---|---|
| Computer / laptop | Claim business-use percentage |
| Software subscriptions | Design tools, accounting apps, cloud storage |
| Tools of your trade | Camera gear, instruments, specialist equipment |
| Office furniture | Desk, chair – business portion if at home |
Travel
| Expense | Notes |
|---|---|
| Public transport | Trains, buses, taxis for business trips |
| Fuel & vehicle costs | Business mileage only (not commuting) |
| Mileage allowance | Alternative to actual vehicle costs |
| Parking & tolls | For business journeys |
| Accommodation | If you travel overnight for work |
Important: Travel between your home and a regular workplace (commuting) is generally NOT allowable.
Professional Services
| Expense | Notes |
|---|---|
| Accountant fees | For preparing your accounts/returns |
| Legal fees | Business-related only |
| Professional memberships | Industry bodies, unions |
| Insurance | Professional indemnity, public liability |
Marketing & Business Development
| Expense | Notes |
|---|---|
| Website hosting & domains | Your business website |
| Advertising | Google Ads, social media ads, flyers |
| Business cards & print | Promotional materials |
| Networking events | Entry fees (not the drinks) |
Financial Costs
| Expense | Notes |
|---|---|
| Bank charges | Business account fees |
| Card processing fees | Stripe, PayPal, Square |
| Interest on business loans | Not the capital repayment |
Training & Development
| Expense | Notes |
|---|---|
| Courses & training | Must be relevant to your current trade |
| Books & resources | Related to your business |
Caution: Training to enter a new profession isn't usually allowable—only training that updates or improves skills in your existing business.
What You CAN'T Claim
- Personal expenses (even if they're convenient)
- Clothing (unless a specific uniform or costume)
- Fines and penalties
- Client entertaining (meals, drinks, hospitality)
- Your own salary or "drawings"
- Childcare costs
- Gym membership (unless you're a fitness professional)
Worked Example
James is a freelance web developer.
Annual income: £45,000
Expenses claimed:
| Category | Amount |
|---|---|
| Home office (simplified) | £312 |
| Laptop (50% business) | £600 |
| Software subscriptions | £1,200 |
| Phone (70% business) | £420 |
| Travel to clients | £800 |
| Accountant | £400 |
| Professional insurance | £250 |
| Total expenses | £3,982 |
Taxable profit: £45,000 − £3,982 = £41,018
By claiming all his legitimate expenses, James reduced his taxable income by nearly £4,000—saving him roughly £1,000 in tax and NI.
The "Mixed Use" Rule
If something is used for both business and personal purposes, claim only the business portion.
- Phone: Track business vs personal use (estimate a percentage)
- Car: Log business miles vs total miles
- Home: Calculate the room/hours used for work
Keep records of how you calculated the split in case HMRC asks.
Simplified Expenses Option
HMRC offers flat-rate simplified expenses for:
- Working from home: Flat rate based on hours worked (e.g., £6/week for 25+ hours)
- Vehicles: Mileage allowance instead of actual running costs
Simplified expenses can be easier, but they're not always the best option. Run the numbers both ways.
Common Mistakes
1. Not claiming everything you're entitled to
Many people miss legitimate expenses because they don't realise they're allowable. Review your bank statements carefully.
2. Claiming personal expenses as business
This is the other extreme—and it can trigger an HMRC enquiry. Be honest.
3. Not keeping receipts
HMRC can ask for evidence up to 5 years after the tax year. Digital photos of receipts are fine.
4. Overclaiming mixed-use items
If you claim 100% of your phone bill but only use it 60% for business, you're overclaiming.
5. Forgetting about home office costs
If you work from home, you can claim something—either simplified expenses or actual costs.
FAQ
Can I claim rent if I work from home?
You can claim a proportion of your rent (and bills) based on business use—either actual costs or HMRC's simplified flat rate.
Can I claim my laptop?
Yes, if you use it for business. If it's also used personally, claim the business-use percentage.
Can I claim gym membership?
Generally no—unless you're a fitness professional and it's essential for your work.
Can I claim meals?
Rarely. Meals while travelling overnight for work are usually fine. Lunches at your desk or with clients are not.
Can I claim training courses?
Yes, if they're relevant to your current trade. Training for a new career isn't allowable.
Can I claim clothing?
Only if it's a specific uniform, costume, or protective gear. Normal work clothes don't count.
Do I need receipts for everything?
You should keep evidence for all claims. Bank statements can work in some cases, but receipts are better.
What about client entertaining?
Not allowable. This includes meals, drinks, and hospitality for clients.
Can I claim car finance?
You can claim either the mileage allowance OR actual vehicle costs (including finance interest)—not both. See our mileage guide.
How long should I keep records?
At least 5 years after the 31 January deadline for that tax year.
Next Steps
Make sure you're claiming everything you're entitled to—and not missing deductions that could lower your tax bill.
Learn more about home office and mileage claims or how much tax to set aside.
Back to the Learn hub.
This guide is for general information only. Tax rules change, and everyone's situation is different. Always check the latest HMRC guidance and consider speaking to a qualified accountant if you're unsure.