What Expenses Can I Claim If I Am Self Employed

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 if I am 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.

From experience, this is one of the most important questions any self employed person can ask, and also one of the most misunderstood. I regularly meet people who are either claiming far less than they are entitled to or worrying unnecessarily about claiming the wrong thing. The rules are not as complicated as they first appear, but they do need to be understood properly, because getting expenses right has a direct impact on how much tax you pay.

In this article, I want to explain clearly what expenses you can claim if you are self employed in the UK. I will walk through the main categories of allowable expenses, explain how HMRC looks at them in practice, and highlight common grey areas and mistakes I see every year. This is written from real professional experience, grounded in HMRC guidance, and aimed at helping you claim confidently and correctly.

The basic rule for claiming expenses

Everything starts with one key principle. HMRC allows you to deduct expenses that are wholly and exclusively for the purposes of your business.

In plain terms, this means the cost must be incurred purely for business reasons. If an expense has a personal element, only the business portion can usually be claimed.

From experience, once you understand this rule, most expense decisions become much clearer.

Day to day running costs you can usually claim

Most self employed businesses have everyday costs that are clearly business related. These are the simplest and least controversial expenses.

Common allowable running costs include:.

• Office supplies such as stationery, printer ink, and paper

• Postage and courier costs

• Phone and internet costs, where the business portion is claimed

• Software subscriptions used for business

• Website hosting, domains, and email services

• Bank charges on business accounts

If these costs are clearly linked to your business activity, they are normally allowable.

Working from home expenses

Many self employed people work from home, either full time or part time. HMRC allows you to claim for this, but the method matters.

You can claim for things like:.

• A portion of electricity and gas

• A portion of water

• Business use of internet and phone

• Council tax or rent, apportioned correctly

There are two common approaches. You can use HMRC’s simplified flat rate method, or you can calculate actual costs based on business use. From experience, the flat rate is simple and safe, while the actual cost method can give a higher claim but needs careful calculation.

One thing I always stress is to avoid overclaiming. Using an entire room exclusively for business can have Capital Gains Tax implications later.

Travel and mileage expenses

Travel is one of the most valuable expense areas for self employed people, and also one of the most commonly misunderstood.

Allowable travel expenses include:.

• Mileage for business journeys

• Train, bus, and taxi fares for business trips

• Parking fees, tolls, and congestion charges

• Accommodation for overnight business travel

You cannot claim ordinary commuting from home to a regular place of work. That distinction is critical.

For vehicles, most people use the mileage allowance method, claiming a fixed rate per business mile. From experience, this keeps things simple and HMRC friendly.

Equipment, tools, and assets

If you buy equipment to run your business, this is usually allowable. This includes:.

• Tools and machinery

• Computers, laptops, and tablets

• Office furniture

• Specialist equipment needed for your trade

Rather than claiming the full cost as an expense, these items are often claimed through capital allowances, which spread or deduct the cost under specific rules. In practice, most small businesses benefit from the Annual Investment Allowance, which gives full relief upfront.

Professional fees and services

Professional support is a legitimate business cost.

You can usually claim for:.

• Accountant and bookkeeper fees

• Legal advice related to the business

• Consultancy fees

• Business coaching or mentoring

• Subscriptions to professional bodies

From experience, this is an area people forget to claim, especially when fees are paid personally rather than from a business account.

Marketing and advertising costs

Promoting your business is an allowable expense when it is done for commercial reasons.

This can include:.

• Website design and development

• Online advertising, including Google and social media ads

• Printed marketing materials

• Business cards and flyers

• Branding and logo design

The key is that the advertising must relate to your business, not personal promotion.

Insurance costs

Business insurance is another commonly allowable expense.

This includes:.

• Public liability insurance

• Professional indemnity insurance

• Employer’s liability insurance

• Business contents insurance

Personal insurance, such as life cover or income protection, is usually not allowable, even if you feel it protects your business income.

Training and education costs

Training can be claimed if it maintains or updates existing skills used in your business.

Allowable examples include:.

• Refresher courses

• Professional development courses

• Industry specific training

What is not allowable is training that gives you a brand new skill or qualification unrelated to your current business. From experience, this is a frequent area of confusion.

Stock and materials

If you sell products or use materials to deliver services, these costs are generally allowable.

This includes:.

• Goods bought for resale

• Raw materials

• Packaging

• Consumables used in your work

These costs are usually matched against income to calculate your profit correctly.

Clothing and uniform costs

Clothing is an area where HMRC is strict.

You can usually claim for:.

• Protective clothing, such as safety boots or helmets

• Specialist uniforms with branding

• Clothing required for health and safety

Everyday clothing, even if worn for work, is not allowable. From experience, this is one of the most common expenses HMRC challenges.

Staff and subcontractor costs

If you pay others to help run your business, these costs are usually allowable.

This includes:.

• Wages and salaries

• Subcontractor costs

• Employer National Insurance

• Pension contributions

The key is that payments are properly recorded and comply with PAYE or CIS rules where applicable.

Interest and finance costs

Some finance related costs can be claimed.

Allowable examples include:.

• Interest on business loans

• Interest on business overdrafts

• Hire purchase interest

Repayments of the loan itself are not an expense, only the interest element.

Expenses you usually cannot claim

From experience, it is just as important to know what you cannot claim.

Common non allowable expenses include:.

• Personal living costs

• Ordinary commuting

• Fines and penalties

• Client entertaining

• Personal clothing

Trying to claim these can lead to problems if HMRC reviews your return.

Record keeping and evidence

HMRC expects you to keep proper records to support your expense claims.

Good practice includes:.

• Keeping receipts and invoices

• Using bank statements to support payments

• Recording mileage accurately

• Keeping records for the required retention period

In my opinion, digital records make this far easier and safer.

Simplified expenses and allowances

HMRC allows simplified expenses for certain costs, such as mileage and working from home. These can reduce admin and risk, but they are not always the most tax efficient option.

From experience, the best choice depends on your circumstances, not convenience alone.

Common mistakes I see every year

The most frequent problems I encounter include:.

• Underclaiming expenses through lack of knowledge

• Overclaiming personal costs

• Poor records that cannot be backed up

• Forgetting expenses paid personally

• Mixing personal and business spending

Each of these can cost money or cause stress later.

How an accountant helps with expense claims

This is one area where an accountant adds real value. I regularly help clients:.

• Identify missed expenses

• Correct incorrect claims

• Set up clear expense systems

• Plan expenses tax efficiently

• Defend claims if HMRC queries them

Often, the tax saved outweighs the fee.

Key points to takeaway

From my experience, understanding what expenses you can claim as a self employed person is one of the most effective ways to reduce your tax bill legally. The rules are not there to catch you out, but they do require care and consistency.

If you focus on the wholly and exclusively rule, keep good records, and review your expenses regularly, you will usually find you are entitled to more than you first thought. When in doubt, ask for advice, because getting it right from the start is far easier than fixing it later.

You may also find our guidance on What is the difference between allowable and disallowable expenses, and Can I claim accounting fees as a business expense, 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.