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Self-Employed Expenses: The Complete Allowable Expenses List

Self-Employed Expenses: The Complete Allowable Expenses List for 2026/27

If you’re self-employed, one of the easiest ways to pay too much tax is to forget about expenses you’re entitled to claim.

Your taxable profit isn’t simply everything your customers pay you. You can normally deduct allowable business expenses first.

So, if your self-employed turnover is £50,000 and you have £15,000 of allowable expenses, your taxable business profit would usually start at £35,000 rather than £50,000.

That can make a real difference to your tax bill.

The difficult part is knowing what HMRC actually allows you to claim.

Can you claim your mobile phone? What about petrol? Lunch? Work clothes? A laptop? Your broadband? An accountant? Software subscriptions? Working from home?

The answer is sometimes yes, sometimes no, and quite often: only the business part.

This guide covers the main expenses sole traders can claim in 2026/27, the costs HMRC won’t normally allow, and some of the grey areas that regularly cause confusion.

This guide is for self-employed sole traders. Different rules can apply if you operate through a limited company.

What Are Allowable Expenses?

Allowable expenses are business costs that you’re permitted to deduct when calculating your taxable self-employed profit.

HMRC gives a straightforward example.

If your turnover is £40,000 and you have £10,000 of allowable expenses, your taxable profit is £30,000.

You don’t get the £10,000 back from HMRC.

Instead, the expenses reduce the amount of business profit on which your tax is calculated.

That’s an important distinction.

A £100 expense doesn’t save you £100 in tax

Suppose you spend £100 on something for your business.

If it’s an allowable expense, you can normally deduct that £100 when calculating your business profit.

That doesn’t mean HMRC sends you £100.

The actual tax saving depends on your circumstances, including your other income, allowances and applicable tax rates.

So don’t buy something you don’t need purely because it’s “tax deductible”.

You’re still spending your own money.

The Golden Rule: Is It Really a Business Expense?

A good starting point is to ask:

Did I incur this cost for my business?

Personal expenses aren’t deductible simply because you’re self-employed.

Where something is used partly for business and partly personally, you can often claim the identifiable business proportion.

For example, suppose your annual mobile phone costs £600 and a reasonable calculation shows 60% of the use relates to your business.

You may be able to claim:

£600 × 60% = £360

You wouldn’t normally claim the personal £240.

Keeping business and personal spending separate makes this much easier.

Complete Self-Employed Allowable Expenses List

Here’s a quick overview before we look at each category properly.

ExpenseUsually allowable?Key point
Business phone calls✅Business proportion
Mobile phone✅Business proportion
Broadband✅Business proportion
Laptop/computer✅Business use; accounting treatment can vary
Accounting software✅If used for the business
Stationery✅Business use
Printer ink✅Business use
Website✅Business costs usually allowable
Advertising✅Business advertising
Business insurance✅Business policies
Accountant✅Business-related work, subject to restrictions
Business bank charges✅Business costs
Business loan interest✅Subject to the tax rules
Fuel✅Business element only
Business mileage✅Actual costs or simplified mileage may apply
Parking for business trips✅Fines are not
Train fares✅Qualifying business travel
Hotels✅Qualifying business trips
Everyday lunch❌Usually personal
Uniform✅Qualifying uniform
Protective clothing✅If required for the work
Ordinary clothes❌Even if you only wear them at work
Tools✅Business use
Materials✅Business use
Stock✅Goods for resale
Subcontractors✅Business cost
Employee wages✅Subject to normal rules
Training✅If sufficiently related to your existing business
Professional subscriptions✅Qualifying business organisations
Client entertainment❌Generally not deductible
Parking fines❌Not allowable
Speeding fines❌Not allowable
Personal drawings❌Taking money out isn’t a business expense
Personal holidays❌Not a business expense

The facts matter, so don’t treat that table as a substitute for checking unusual or high-value costs.

1. Mobile Phone Expenses

Your mobile phone is one of the most commonly overlooked self-employed expenses.

If you use your phone for things such as:

then there may be a business element to the cost.

If the phone is also your personal phone, you should normally claim only the business proportion.

Example

Your mobile contract costs:

£50 per month × 12 = £600

You reasonably estimate that 70% of its use relates to your business.

Your business expense would be:

£600 × 70% = £420

Keep your calculation sensible and be able to explain how you arrived at it.

2. Internet and Broadband

Broadband can also be an allowable expense where it’s used for your business.

That might include:

If your household broadband is also used personally, only the appropriate business proportion should be claimed.

The same principle applies to other mixed-use expenses throughout this guide.

3. Computers, Laptops and Tablets

A computer or laptop used for your business can normally attract tax relief, but exactly how you claim it depends on your accounting method and circumstances.

This distinction has become particularly relevant because cash basis is now the default method of calculating trading profits for many sole traders.

Under the cash basis, equipment such as computers and machinery that you buy and keep for your business can generally be treated as an allowable expense, subject to exclusions.

Cars are treated differently.

If you use traditional accounting, equipment you keep for use in the business will commonly be dealt with through the capital allowances rules rather than simply being treated as an ordinary day-to-day expense.

If an asset is partly personal, the private use also needs to be considered.

For an expensive purchase, it’s worth checking the correct treatment rather than automatically putting the full cost through as an expense.

4. Software and App Subscriptions

Think about how many pieces of software you now use to run a business.

Potentially allowable costs include:

The same basic rule applies: the subscription needs to relate to your business.

If there’s personal use as well, consider whether an adjustment is required.

5. Office Expenses and Stationery

Everyday office costs are generally straightforward.

Examples can include:

Don’t dismiss small purchases.

£10 here and £20 there might not seem worth recording, but over a full tax year they can add up.

6. Working From Home

Millions of sole traders run some or all of their business from home.

You may be able to claim a proportion of household costs including:

You cannot simply claim your entire household bill because you occasionally answer an email at the kitchen table.

You need a reasonable way of dividing business and private use.

That might take account of:

Example

Imagine you have four rooms and use one as an office.

If the room represents one quarter of the relevant household space, that might form the starting point for allocating certain costs.

But if you only use that room for business for part of the time, you may need to reduce the claim further.

There isn’t one percentage that works for every home business.

Simplified Working From Home Expenses

There’s another option.

Sole traders can choose to use HMRC’s simplified expenses for working from home rather than calculating the relevant actual household costs.

For 2026/27 the monthly flat rates are:

Business use of homeMonthly flat rate
Less than 25 hoursNo flat-rate claim
25–50 hours£10
51–100 hours£18
101+ hours£26

These rates don’t include telephone and internet expenses, so the appropriate business proportion of those costs can be calculated separately.

The flat-rate method is easier, but it isn’t automatically the most valuable claim.

It’s worth comparing the simplified figure with a reasonable calculation based on your actual costs.

7. Car and Van Expenses

Vehicles are one of the areas where self-employed expense claims can become confusing.

If you use a vehicle for qualifying business journeys, you may be able to claim costs such as:

But only the business element is deductible.

Private journeys aren’t business expenses.

There is also an alternative: simplified mileage expenses.

And there’s a major change for 2026/27.

New Self-Employed Mileage Rate for 2026/27

From 6 April 2026, the simplified expense rate for cars and goods vehicles increased.

Vehicle2026/27 simplified mileage rate
Cars and goods vehicles – first 10,000 business miles55p per mile
Cars and goods vehicles – over 10,000 business miles25p per mile
Motorcycles24p per mile

The first 10,000-mile rate was previously 45p.

Example

You drive 8,000 qualifying business miles during 2026/27.

Using simplified mileage:

8,000 × 55p = £4,400

Your mileage expense would be £4,400.

You don’t then add petrol, insurance, servicing and repairs for the same vehicle on top. The mileage rate is being used instead of those vehicle running costs.

You can still claim qualifying costs such as business parking separately.

Once you’ve chosen simplified mileage for a particular vehicle, HMRC’s rules generally require you to continue using that method for that vehicle while it remains in the business.

8. Travel Expenses

Qualifying business travel can include:

But not every journey you make because you happen to be self-employed is automatically business travel.

Private travel isn’t allowable.

HMRC also specifically excludes ordinary travel between your home and work.

The rules around where a self-employed person’s business is based and whether a particular journey is business travel can become complicated, particularly for tradespeople who work at different locations.

Don’t assume every mile driven while wearing your work boots qualifies.

9. Food and Meals

This is one of the most misunderstood expenses.

Your normal breakfast, lunch or evening meal is generally a personal living cost.

The fact that you happen to eat it while working doesn’t suddenly make it tax deductible.

There are circumstances where qualifying subsistence costs can be claimed, such as reasonable meals connected with certain business travel and overnight business trips.

But:

“I was working when I ate my sandwich” isn’t enough to make lunch an allowable expense.

Be particularly careful about putting every café and takeaway receipt through your business.

10. Hotels and Accommodation

If you have to stay away from home for qualifying business reasons, hotel or similar accommodation costs can potentially be allowable.

For example, a self-employed photographer might travel to another city for a two-day commercial shoot and need to stay overnight.

That’s very different from adding a couple of client meetings to a family holiday and trying to claim for the whole trip.

Where a trip has both private and business purposes, the tax treatment depends on the facts.

11. Parking, Tolls and Congestion Charges

Business-related parking can normally be claimed.

Other qualifying travel charges may also be deductible.

But there’s a major exception:

Fines and penalties aren’t allowable business expenses.

That includes parking fines.

A £5 parking fee while visiting a customer could be an expense.

A £70 penalty because you overstayed isn’t.

12. Work Clothes

This is another area where people often get caught out.

You can potentially claim for:

Examples might include:

What can’t you normally claim?

Everyday clothes.

That remains the case even if:

A consultant can’t normally claim for an ordinary suit simply because it’s only worn at client meetings.

The distinction is between ordinary clothing and qualifying uniforms, costumes or protective clothing.

13. Tools

If you’re a tradesperson, tools can form a large part of your expenses.

Potential examples include:

The exact tax treatment of larger equipment can depend on whether you’re using cash basis or traditional accounting.

Don’t forget small replacement tools either. Individually they may not cost much, but across a year the total can become substantial.

14. Materials and Stock

If you buy goods that are directly connected with what you sell, these can generally be deductible in calculating your business profit.

Examples include:

Example

A self-employed carpenter spends £4,000 on timber and materials used on customer jobs.

Those materials are part of the cost of earning the business’s income and can normally be taken into account when calculating its taxable profit.

15. Business Premises

If you rent a workshop, office, studio, shop or other business premises, you can potentially claim relevant running costs.

Examples include:

Personal living costs aren’t allowable simply because they’re paid from the same bank account.

Special rules can also apply if you live at your business premises, such as a guesthouse or bed and breakfast.

16. Business Insurance

Insurance policies taken out for your business can normally be allowable.

Examples include:

Your ordinary personal insurance isn’t automatically deductible.

17. Accountant and Professional Fees

You can normally claim business-related professional costs such as fees paid to:

There are exceptions.

For example, HMRC says the cost of preparing and submitting your Self Assessment tax return itself isn’t an allowable expense.

That distinction can matter where an accountant’s bill covers both business accounts work and personal tax return work.

Legal costs connected with buying property or machinery may also have a different tax treatment.

18. Bank Charges and Interest

Business financial costs can include:

You can’t claim the repayment of the loan itself as though it were an ordinary expense.

The tax treatment of finance costs can also depend on what the borrowing was used for.

19. Advertising and Marketing

Money genuinely spent promoting your business can usually be claimed.

Examples include:

For many freelancers and online businesses, marketing costs can be one of the larger expense categories.

20. Website Costs

Costs associated with operating and promoting your business website can often be allowable.

Examples might include:

Larger projects or costs that create a lasting asset can require more thought about their tax treatment, so don’t automatically treat every large website project as an ordinary recurring expense.

21. Client Entertainment

Here’s an expense that catches people out.

Business entertainment is generally not an allowable deduction for tax purposes.

So taking a potential customer out for dinner doesn’t normally become tax deductible just because you discussed business over dessert.

HMRC specifically excludes entertaining clients, suppliers and customers and event hospitality from ordinary allowable business expenses.

You should still record these costs properly in your bookkeeping if the business paid them, but don’t assume they’re deductible when calculating taxable profit.

22. Gifts to Customers

Most business gifts aren’t deductible under the normal rules.

There are exceptions and separate rules that can apply to certain promotional items and other circumstances, but this isn’t an area where I’d recommend assuming that every Christmas bottle or customer present is allowable.

If customer gifts are a regular or material expense for your business, check the detailed rules.

23. Staff Wages

If you employ people, allowable staff costs can include:

The payments must, of course, genuinely relate to the business.

You can’t turn personal household costs into business expenses by putting them through the payroll.

24. Subcontractors

Payments to genuine subcontractors working for your business can normally be claimed.

For example, a builder might pay another tradesperson to complete part of a customer project.

If you work in construction, remember that the Construction Industry Scheme (CIS) may also apply.

The fact that a payment is deductible doesn’t remove your other tax and reporting responsibilities.

25. Training Courses

The rules on training are more generous than some sole traders realise.

You can potentially claim for training that helps you:

But you can’t normally claim for training that is designed to help you start an entirely new business or move into an unrelated area.

Example

A self-employed photographer pays for a course on advanced commercial lighting techniques.

That relates to improving skills used in the existing trade.

If the same photographer pays for a course qualifying them as a plumber so they can start an unrelated plumbing business, that’s a different situation.

26. Professional Memberships and Subscriptions

You may be able to claim relevant subscriptions such as:

The organisation or publication needs to relate to your business.

HMRC doesn’t generally allow personal memberships simply because you find them useful.

Gym memberships, for example, aren’t normally allowable business subscriptions.

27. Books and Publications

Books, manuals and publications bought for the purposes of your existing business may be deductible depending on what they are and why they’re required.

Examples might include:

Again, the connection with your business matters.

28. Bad Debts

Bad debts work differently depending on how you calculate your profits.

Under traditional accounting, you may be able to claim for customer debts that were included in turnover but which you’re now sure won’t be recovered, subject to HMRC’s conditions.

Under cash basis, there’s normally no separate bad debt deduction.

Why?

Because you generally record the customer income when you actually receive it.

If they never paid you, the unpaid amount wasn’t included as cash-basis income in the first place.

29. Repairs and Maintenance

The cost of repairing and maintaining business equipment or premises can often be allowable.

Examples might include:

Be careful where you’re improving an asset rather than simply repairing it.

A repair and a major improvement aren’t necessarily treated in the same way for tax.

30. Business Equipment

Equipment used in your business can potentially qualify for tax relief.

Examples include:

How relief is given depends partly on whether you use the cash basis or traditional accounting.

Under cash basis, many items of business equipment are treated as expenses when paid for.

Under traditional accounting, capital allowances commonly apply instead.

Cars remain subject to separate rules.

What Can’t Self-Employed People Claim?

Sometimes knowing what isn’t allowable is just as useful.

Common examples include:

Paying something from your business bank account doesn’t magically turn it into a tax-deductible expense.

What If Something Is Partly Business and Partly Personal?

This is extremely common.

Think about:

You don’t necessarily have to lose the entire deduction just because there’s some personal use.

Where the expense can properly be divided, you can generally claim the business element.

Example

Your broadband costs £480 for the year.

After considering how it’s used, you reasonably calculate that 50% relates to your business.

Potential business expense:

£480 × 50% = £240

Keep a note explaining how you’ve calculated your percentage.

Don’t simply pick 90% because it produces a bigger deduction.

Actual Expenses vs Simplified Expenses

Sole traders can use HMRC’s simplified expenses for certain costs.

These cover:

They’re optional.

The advantage is simplicity.

Instead of working out exactly how much petrol, insurance, electricity and other relevant costs relate to the business, you use HMRC’s prescribed flat-rate calculation.

But simpler doesn’t necessarily mean a larger deduction.

If your genuine business costs are high, calculating actual expenses may produce a larger allowable amount.

Compare the methods where you have a choice.

What Is the £1,000 Trading Allowance?

The trading allowance is separate from normal allowable expenses.

If eligible, you may be able to use up to a £1,000 trading allowance against trading income rather than deducting your actual business expenses.

You cannot claim the trading allowance and deduct your actual expenses from the same trading income.

Example

Suppose your turnover is £8,000.

Your actual allowable expenses are £300.

Using actual expenses would leave:

£8,000 − £300 = £7,700

If you’re eligible to use the full £1,000 trading allowance instead:

£8,000 − £1,000 = £7,000

The allowance could be better.

But imagine your expenses are £3,500.

Actual expenses:

£8,000 − £3,500 = £4,500

In that case, using a £1,000 allowance instead would clearly be less attractive.

Which approach is right depends on your circumstances.

Do Expenses Reduce Your Making Tax Digital Threshold?

Here’s a particularly important point for sole traders affected by Making Tax Digital for Income Tax.

Don’t confuse taxable profit with MTD qualifying income.

If you have:

£60,000 turnover

and:

£25,000 allowable expenses

your business profit might be £35,000 before considering any further tax adjustments.

But that doesn’t necessarily mean you’re below the MTD threshold.

MTD qualifying income is broadly based on gross income before expenses from your relevant self-employment and property sources.

Expenses remain very important for calculating taxable profit.

They don’t simply reduce your turnover when testing whether you cross the MTD qualifying-income threshold.

Do You Need Receipts for Every Expense?

Good records matter.

Keep evidence supporting your business income and expenses so that you can explain the figures in your tax return if HMRC asks.

Depending on the expense, useful records can include:

Don’t wait until January to try to remember what a £73 payment from nine months ago was for.

Record expenses while they’re fresh in your mind.

How Long Should You Keep Self-Employed Expense Records?

If you’re self-employed, HMRC generally requires you to keep your records for at least five years after the 31 January submission deadline for the relevant tax year.

For example, records supporting a particular Self Assessment return may need to be retained for several years after the tax year itself ends.

Longer periods can apply in some circumstances.

Digital record keeping makes this much easier because receipts don’t have to live in a carrier bag or shoebox for years.

How Making Tax Digital Changes Expense Recording

Making Tax Digital for Income Tax is changing how affected sole traders keep their records.

Rather than collecting everything once a year and trying to reconstruct your accounts before 31 January, MTD requires affected taxpayers to maintain relevant records digitally.

That makes getting into a regular bookkeeping habit much more useful.

For example:

Customer pays you → record income

Buy business materials → record expense

Pay software subscription → record expense

Drive to qualifying business appointment → record mileage

Keeping records up to date makes both quarterly MTD updates and the eventual tax return easier to deal with.

Common Self-Employed Expense Mistakes

Not claiming legitimate expenses

Some sole traders are so worried about HMRC that they don’t claim costs they’re perfectly entitled to deduct.

That means unnecessarily paying tax on profit they haven’t really made.

Claiming everything

The opposite approach is equally problematic.

Putting every restaurant bill, Amazon order and petrol receipt through the business doesn’t make them allowable.

There needs to be a genuine business basis.

Claiming 100% of mixed expenses

If your mobile, broadband or vehicle has substantial private use, don’t automatically claim the whole cost.

Claiming ordinary clothes

Buying a smart outfit for meetings doesn’t normally make it tax deductible.

Claiming ordinary lunches

Everyone needs to eat. Your normal lunch doesn’t generally become a business expense simply because you were working.

Mixing mileage and actual vehicle costs

If you’re using simplified mileage for a vehicle, don’t also claim petrol, insurance and servicing for the same vehicle as though they were separate expenses.

Forgetting small expenses

Postage, parking, software, stationery and other small costs can add up to hundreds or thousands of pounds across a year.

Example: How Much Difference Can Expenses Make?

Meet Sarah.

Sarah is a self-employed graphic designer with annual turnover of:

£52,000

During the year she has:

ExpenseAmount
Software£1,500
Laptop/equipment£1,200
Advertising£900
Phone and internet business use£700
Accountant/business professional costs£800
Working from home£600
Business travel£1,000
Professional subscriptions£300
Other allowable costs£1,000
Total£8,000

Her starting business profit calculation becomes:

£52,000 turnover − £8,000 expenses = £44,000

That’s £8,000 of genuine business costs that would have been missed if Sarah had simply reported her turnover without properly recording her expenses.

The eventual amount of Income Tax and National Insurance she pays depends on her full tax position.

Self-Employed Expenses Checklist

When reviewing your bookkeeping, check whether you’ve recorded relevant business costs in each of these areas:

Don’t claim something simply because it appears on this checklist. You still need to check that the particular cost is allowable in your circumstances.

Frequently Asked Questions About Self-Employed Expenses

Can I claim my mobile phone?

Yes, where it relates to your business. If the phone is also used personally, you should normally restrict the claim to the business proportion.

Can I claim broadband?

Potentially, yes. Again, where you have mixed business and personal use, you should calculate a reasonable business proportion.

Can I claim petrol?

Business vehicle costs can potentially be claimed using actual costs, or you may be able to use HMRC’s simplified mileage rates instead.

For 2026/27, the simplified rate for cars and goods vehicles is 55p per business mile for the first 10,000 miles and 25p thereafter.

Can I claim mileage and petrol?

Not for the same vehicle journeys if you’re using simplified mileage. The mileage rate is designed to cover the vehicle running costs included within the scheme.

Can I claim my lunch?

Your normal everyday meals aren’t generally allowable simply because you’re working. Different rules can apply to qualifying subsistence connected with certain business travel.

Can I claim work clothes?

Uniforms, protective clothing and qualifying costumes can be allowable. Ordinary everyday clothing isn’t normally deductible, even if you only wear it for work.

Can I claim a laptop?

A laptop genuinely used in your business can qualify for tax relief. How the deduction is given can depend on your accounting method and whether there’s private use.

Can I claim an accountant?

Business-related accountancy costs can generally be allowable, but HMRC specifically says the cost of preparing and submitting your Self Assessment tax return isn’t an allowable business expense.

Can I claim accounting software?

Software genuinely used to run your business can generally be an allowable business cost.

Can I claim parking?

Qualifying business parking can be allowable. Parking fines and other penalties aren’t.

Can I claim client meals?

Business entertaining of clients, suppliers and customers is generally not an allowable deduction.

Can I claim expenses without receipts?

Your tax position doesn’t simply turn on whether you have a paper receipt, but you need proper records to support your figures. Keep invoices, digital receipts, bank records and other evidence wherever possible.

Can I claim expenses paid from my personal bank account?

Paying a genuine business expense personally doesn’t automatically stop it being a business expense. What matters is the nature of the cost. Make sure it’s properly recorded in your business records.

Do allowable expenses reduce my tax?

Allowable expenses reduce the taxable profit of your business. The actual amount of tax saved depends on your overall circumstances.

In Summary

The principle behind self-employed expenses is fairly simple:

If you genuinely spend money for the purposes of running your business, there’s a good chance tax relief may be available.

But that doesn’t mean everything you buy while self-employed is deductible.

Keep business and personal spending separate where possible, record expenses as you go and keep evidence supporting what you’ve claimed.

Pay particular attention to mixed-use costs such as your phone, broadband, home and vehicle. Claim the appropriate business element rather than automatically putting the whole bill through your accounts.

And don’t overlook the small stuff.

A £12 software subscription, £8 parking charge or £20 box of printer ink doesn’t seem like much on its own. Across an entire year, legitimate expenses can add up to a substantial amount.

Good bookkeeping isn’t about claiming as much as possible.

It’s about claiming what you’re entitled to, keeping records that support it and paying tax on the right amount of profit.

This guide is based on HMRC rules and guidance available for the 2026/27 tax year. Tax treatment can depend on your individual circumstances, and special rules apply to some expenses. This article is aimed at self-employed sole traders rather than limited companies.

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