What Expenses Can I Claim as Self Employed?

Introduction

At Towerstone Accountants we provide specialist personal tax services, for self employed, and individuals across the UK. This article has been written to explain what expenses can i claim as self employed, in clear practical terms, so you understand how personal tax and Self Assessment rules apply in real situations. Our aim is to help you stay compliant, avoid costly mistakes, and make confident tax decisions.

One of the first questions I hear from anyone who becomes self employed is what expenses they are actually allowed to claim. From experience this is also one of the biggest areas of confusion and one of the most common reasons people either overpay tax or worry unnecessarily about getting things wrong.

HMRC allows self employed individuals to deduct certain costs from their income before tax is calculated. These deductions can significantly reduce your tax bill but only if they are claimed correctly. Claim too little and you pay more tax than you need to. Claim too much or claim incorrectly and you risk penalties interest or a stressful HMRC enquiry.

In this article I explain clearly and practically what expenses you can claim as self employed under UK tax rules. I will walk through how the rules work in practice who they apply to and which expenses are commonly allowed. I will also highlight areas that often cause confusion and share advice based on real world experience so you can claim confidently and correctly.

What Does Self Employed Mean for Tax Purposes?

Before looking at expenses it is important to be clear on what HMRC means by self employed.

You are generally classed as self employed if you run your own business or work for yourself rather than being employed under PAYE. This includes sole traders freelancers contractors and many gig economy workers.

As a self employed individual you are responsible for:

• Keeping records of income and expenses

• Completing a Self Assessment tax return

• Paying Income Tax and National Insurance

• Ensuring expenses claimed meet HMRC rules

Unlike employees you are taxed on profits not turnover. That means your allowable expenses directly affect how much tax you pay.

The Core Rule for Claiming Expenses

The most important rule to understand is HMRC’s wholly and exclusively test.

An expense is usually allowable if it is incurred wholly and exclusively for the purposes of your trade.

In plain terms this means the cost must be incurred only because of your business. If the expense has a personal element it may need to be restricted or disallowed altogether.

From experience this is where most mistakes happen. People assume that because something helps them work it must be allowable. HMRC applies a stricter test than that.

General Categories of Allowable Expenses

HMRC does not provide a fixed shopping list of allowable expenses. Instead expenses fall into broad categories. Below I explain the most common ones and how they work in practice.

Office Costs

Office costs are one of the most straightforward categories.

You can usually claim expenses such as:

• Stationery and printing

• Postage and courier costs

• Computer consumables

• Small office equipment

• Business phone line costs

If you work from an office outside the home these costs are usually fully allowable.

If you work from home the treatment is slightly different which I will cover later.

Business Premises Costs

If you rent business premises you can usually claim:

• Rent

• Business rates

• Utilities

• Insurance

• Cleaning

• Repairs and maintenance

These costs are allowable provided the premises are used solely for business.

From experience issues arise where premises are partly business and partly personal. In those cases costs must be apportioned.

Travel Expenses

Travel expenses are commonly claimed but also commonly misunderstood.

You can usually claim the cost of travel that is wholly and exclusively for business purposes.

Allowable travel expenses include:

• Mileage for business journeys

• Train and bus fares for business travel

• Taxi fares for business purposes

• Parking fees related to business travel

• Hotel accommodation for business trips

Travel between different work locations is usually allowable. Travel from home to a permanent place of work is generally not.

For example travelling to a client meeting is allowable. Commuting to a regular office location is not.

From experience mileage claims are often underclaimed or incorrectly calculated. HMRC allows a simplified mileage rate which many self employed people find easier to use.

Vehicle Costs and Mileage

If you use your own vehicle for business you have two main options.

You can either claim actual vehicle costs or use HMRC’s simplified mileage rates.

The simplified mileage rates currently allow a set amount per mile for business journeys. This rate covers fuel insurance servicing and wear and tear.

Alternatively you can claim a proportion of actual costs such as fuel insurance repairs and road tax based on business use.

From experience the mileage method is simpler and often more tax efficient for many sole traders especially in early years.

Once you choose a method there are restrictions on switching later so it is worth taking advice early.

Working From Home Expenses

Many self employed people work from home either full time or part time.

HMRC allows you to claim a portion of household costs provided the home is used for business.

You can either use HMRC’s simplified flat rate or calculate actual costs.

Allowable home working expenses can include:

• Electricity and gas

• Water

• Council tax

• Mortgage interest or rent

• Internet and phone usage

You must apportion costs based on business use. This is usually done by considering the number of rooms and the amount of time they are used for work.

From experience this area causes anxiety but HMRC does not expect perfection. They expect a reasonable and consistent method.

Phone and Internet Costs

You can claim business phone and internet costs but care is needed.

If you have a separate business phone or broadband line you can usually claim the full cost.

If you use personal services for both business and personal use you can only claim the business proportion.

From experience claiming a sensible percentage based on usage is usually acceptable. Claiming the full cost of a personal mobile contract rarely is.

Professional Fees and Subscriptions

Professional costs are commonly allowable.

You can usually claim:

• Accountancy fees

• Bookkeeping costs

• Legal fees related to business matters

• Business coaching or consultancy

• Professional body subscriptions

Subscriptions must relate to your trade. HMRC maintains a list of approved professional organisations.

From experience accountancy fees are one of the safest and most sensible expenses to claim.

Marketing and Advertising

Marketing costs are generally allowable if they promote your business.

These can include:

• Website costs

• Online advertising

• Printed marketing materials

• Branding and design

• Social media advertising

From experience marketing expenses are rarely challenged provided they clearly relate to business promotion.

Be cautious with costs that could be personal in nature such as clothing or image related spending which I will cover later.

Software and Online Tools

Accounting software and business tools are usually allowable expenses.

This includes:

• Accounting and invoicing software

• CRM systems

• Design or editing software

• Industry specific tools

Subscription based software is usually treated as a revenue expense and deducted in full.

From experience this is an area people forget to claim especially when subscriptions are paid monthly.

Training and Courses

Training costs can be allowable but this is an area where HMRC draws clear boundaries.

You can usually claim training that maintains or updates existing skills used in your business.

You generally cannot claim training that gives you a new skill or qualification.

For example refresher training in your existing profession may be allowable. Training to move into a new line of work usually is not.

From experience this distinction often surprises people.

Clothing and Appearance

This is one of the most misunderstood areas.

Ordinary clothing is not allowable even if you wear it for work.

HMRC only allows clothing expenses if the clothing is protective or a uniform.

Examples include:

• Protective clothing such as safety boots

• Branded uniforms

• Specialist clothing required for the role

Everyday clothing even if worn exclusively for work is not allowable.

From experience this is one of the most commonly disallowed expense categories.

Food and Subsistence

You cannot usually claim everyday food costs.

Meals are considered a personal expense.

However subsistence can be allowable when you are travelling for business and working away from your normal base.

For example meals while staying overnight for business may be allowable.

Regular lunches during a normal working day are not.

From experience trying to claim routine food costs is a common mistake.

Insurance

Business related insurance is usually allowable.

This includes:

• Public liability insurance

• Professional indemnity insurance

• Employer liability insurance

Personal insurance policies are not allowable.

Bank Charges and Finance Costs

You can usually claim:

• Business bank charges

• Transaction fees

• Interest on business loans

If you use a personal account for business only the business related charges should be claimed.

From experience having a separate business bank account makes this much cleaner.

Use of Personal Assets

If you use personal assets such as a laptop phone or tools for business you may be able to claim a proportion of the cost or claim capital allowances.

The treatment depends on value usage and timing.

From experience this is an area where tailored advice helps avoid errors.

Capital Allowances and Equipment

Larger items such as equipment tools or machinery are often treated as capital rather than day to day expenses.

Instead of deducting the cost as an expense you claim capital allowances which provide tax relief.

Many items qualify for full relief under the Annual Investment Allowance.

From experience capital allowances are often underclaimed because people assume only day to day costs matter.

What You Cannot Claim

Equally important is understanding what you cannot claim.

Common non allowable expenses include:

• Personal living costs

• Ordinary clothing

• Private fines or penalties

• Personal travel

• Client entertaining

• Drawings or wages paid to yourself

From experience client entertaining is often misunderstood. You can claim the cost in your accounts but it is disallowed for tax.

Record Keeping Requirements

HMRC requires you to keep records of income and expenses.

You should keep:

• Receipts and invoices

• Bank statements

• Mileage logs

• Notes explaining unusual expenses

Records must generally be kept for at least five years after the submission deadline.

From experience good records reduce stress and make HMRC enquiries far easier to handle.

Simplified Expenses Option

HMRC offers simplified expenses for certain categories such as mileage home working and vehicle use.

This can make life easier but it is not always the most tax efficient option.

From experience it is worth comparing simplified expenses with actual costs before choosing.

Common Mistakes I See

There are patterns I see repeatedly.

People often underclaim expenses because they are unsure what is allowed.

Others overclaim by including personal costs or guessing percentages.

Another common issue is leaving expense review until the tax return deadline rather than planning throughout the year.

From experience proactive review saves time and tax.

A Real World Example From Experience

Consider a self employed consultant.

Initially they claimed very few expenses and paid more tax than necessary.

After reviewing their position we identified allowable home working costs software subscriptions professional fees and mileage that had been missed.

The result was a lower tax bill and greater confidence.

This is a common outcome when expenses are reviewed properly.

How Expenses Fit Into Tax Planning

Claiming expenses is not about pushing boundaries. It is about accuracy.

Accurate expense claims lead to accurate profit figures which support better planning.

From experience people who understand their expenses make better business decisions and face fewer HMRC issues.

When to Get Advice

If you are unsure whether an expense is allowable or how to apportion costs it is worth asking.

A short conversation can prevent costly mistakes.

From experience most issues arise not from dishonesty but from misunderstanding.

The key takeaway

Understanding what expenses you can claim as self employed is one of the most powerful ways to manage your tax bill legally and confidently.

HMRC allows a wide range of genuine business costs but expects honesty consistency and evidence.

The key principles are simple. The expense must be for the business it must be reasonable and it must be supported.

If you keep those principles in mind and review your expenses regularly you will be well placed to claim what you are entitled to without unnecessary risk.

If in doubt ask early rather than worry later.

You may also find our guidance on Can I claim accounting fees as a business expense, and How do I record mileage and travel expenses, helpful when reviewing related personal tax questions. For a broader overview of Self Assessment deadlines, reporting, and obligations, you can visit our self assessment guidance hub.