What are allowable expenses for the self-employed?
If you are self-employed, your business will usually have running costs. HMRC refers to qualifying business costs that can be deducted when calculating taxable profit as allowable expenses.
For example, if your business receives £40,000 and has £10,000 of allowable expenses, the starting point for your taxable business profit would normally be £30,000 rather than £40,000.
An allowable expense does not normally give you the whole cost back. Instead, it reduces the business profit on which your tax is calculated.
Who does this guide apply to?
This guide focuses on people HMRC treats as self-employed, such as sole traders and individuals who are members of a business partnership.
If you operate through a limited company, HMRC does not treat you as self-employed simply because you own or work for the company. Company expenses and Corporation Tax follow different rules.
What expenses can a self-employed person claim?
The exact expenses depend on the type of business you operate, but HMRC identifies a number of common categories.
Office costs
Business stationery, postage, software and qualifying phone costs can potentially be included.
Travel & vehicles
Qualifying business journeys, fuel, insurance, parking or mileage may be deductible depending on the method used.
Business premises
Rent, utilities, business rates, security and certain other costs of business premises may qualify.
Tools & equipment
Equipment needed for the business may be deductible, although capital-allowance rules can apply to some purchases.
Insurance & finance
Business insurance, bank charges and certain professional or financial costs can potentially qualify.
Marketing
Advertising, websites and other qualifying marketing costs may be deducted from business income.
Stock & materials
Goods bought for resale and raw materials used in the business can generally be relevant business costs.
Staff costs
Qualifying wages, subcontractor costs and certain associated employment costs may be deductible.
What if something is used for both business and personal purposes?
Where a cost has both business and private use, you generally cannot claim the whole amount simply because it is partly used for your business.
You normally need to identify the business proportion.
A £200 phone bill is not automatically a £200 expense
If annual phone costs total £200 but £130 relates to personal calls and £70 relates to business calls, HMRC's example allows £70 as the business expense.
The principle is that only the identifiable business cost is deducted.
Can you claim self-employed travel and vehicle costs?
Qualifying business travel can potentially include costs such as vehicle insurance, repairs, servicing, fuel, parking, vehicle tax, breakdown cover and public transport.
Hotels and meals associated with qualifying overnight business trips can also be allowable in appropriate circumstances.
You cannot normally claim personal travel, fines or penalties, or ordinary travel between home and your normal place of business.
Cars and goods vehicles: 55p then 25p per business mile
For 2026/27, HMRC's simplified-expense rate for cars and goods vehicles is 55p per mile for the first 10,000 business miles and 25p per mile thereafter.
The simplified rate for motorcycles remains 24p per business mile.
Simplified mileage is an alternative method of calculating qualifying vehicle expenses. The rules also restrict switching methods for a vehicle once simplified expenses have been used.
Can you claim expenses for working from home?
If part of your home is used for your self-employed business, you may be able to claim a reasonable business proportion of certain household costs.
These can potentially include:
- Heating.
- Electricity.
- Council Tax.
- Mortgage interest or rent.
- Internet use.
- Telephone use.
Where actual costs are used, HMRC expects a reasonable method of separating the business portion. That can involve factors such as the rooms used and the amount of time they are used for business.
Simplified working-from-home expenses
| Business hours at home | Flat rate per month |
|---|---|
| 25 to 50 hours | £10 per month |
| 51 to 100 hours | £18 per month |
| 101 hours or more | £26 per month |
The home-working flat rate is optional. HMRC also allows the appropriate business proportion of some costs outside the flat rate in particular circumstances, including telephone and broadband costs.
Can you claim your mobile phone and internet?
Business telephone and internet costs can potentially be claimed, but mixed-use services need to be divided between business and private use where the private element is significant.
For example, if 40% of a mobile-phone contract genuinely relates to business use, the relevant business portion may be deductible rather than automatically claiming the whole contract.
Can you claim tools and equipment?
Items genuinely required for the business may be deductible, but the tax treatment can depend on what the item is and the accounting method you use.
Under traditional accounting, capital allowances may be relevant when buying equipment, machinery and business vehicles. Under cash-basis rules, many items bought and kept for the business are dealt with through normal business expenses, although cars have specific rules.
Some purchases are treated as capital expenditure rather than an ordinary day-to-day expense. The correct treatment depends on the asset and your accounting basis.
Can self-employed people claim clothing expenses?
Some specialist clothing can qualify, but ordinary everyday clothing generally does not become a business expense simply because you wear it while working.
Qualifying examples can include uniforms and protective clothing needed for the business.
Can you claim insurance, bank and professional costs?
Certain financial and professional costs incurred for the business may be deductible.
Depending on the circumstances, examples can include:
- Business insurance.
- Bank charges.
- Accountancy costs.
- Legal costs relating to the business.
- Professional subscriptions relevant to the business.
Not every legal or financial cost qualifies, so the purpose of the expense matters.
Can self-employed training costs be claimed?
HMRC lists training courses related to the business as a potential allowable expense.
This can include refresher or updating training connected with your existing business activity. The position can be different where training is intended to establish an entirely new trade or profession.
What self-employed expenses cannot normally be claimed?
Not every payment made while running a business is deductible.
| Cost | General treatment |
|---|---|
| Personal spending | Private expenditure is not an allowable business expense. |
| Your own drawings | Money taken from the business for yourself is not a business expense. |
| Ordinary commuting | Travel between home and your normal place of business is generally not allowable. |
| Fines and penalties | Parking fines and similar penalties cannot normally be claimed as travel expenses. |
| Business entertainment | Client or customer entertainment is generally not an allowable deduction for Income Tax purposes. |
What is the £1,000 trading allowance?
The trading and miscellaneous income allowance is currently up to £1,000.
Depending on your circumstances, it can provide relief against qualifying trading income instead of calculating profits by deducting actual expenses.
You cannot normally use the trading allowance and deduct the same business expenses
Where you choose the trading-allowance method for relevant income, you do not also deduct actual allowable expenses and capital allowances against that same income.
If your genuine business expenses are greater than £1,000, calculating profits using actual expenses may produce a different result.
What are simplified expenses?
Simplified expenses are optional flat-rate methods available to qualifying sole traders and certain partnerships.
They can be used for:
- Some vehicle costs.
- Working from home.
- Living at business premises.
Other business expenses still need to be calculated using their actual allowable costs.
HMRC provides a simplified-expenses checker so sole traders and qualifying partnerships can compare the flat-rate method with actual-cost calculations.
How do you claim self-employed expenses?
HMRC requires you to keep accurate records of your business expenses and claim allowable costs through your Self Assessment tax return.
Record the expense
Keep a clear record of what was purchased, when it was paid and how it relates to the business.
Keep supporting evidence
Retain receipts, invoices, bank records, mileage logs and other evidence relevant to the expense.
Separate personal use
Where something has mixed use, calculate a reasonable business portion rather than claiming private spending.
Report allowable expenses
Include the appropriate expense figures when completing your Self Assessment tax return.
You do not normally send all expense evidence with the tax return, but HMRC says you should retain proof so it can be provided if requested.
Reviewed & Updated
17 August 2026
2026/27
GO TAX REFUNDS
HM Revenue & Customs / GOV.UK
Whether an expense is allowable depends on the nature of the cost, the business purpose, private use and the accounting method used. This guide provides general information rather than determining the treatment of any individual expense.
Self-Employed Expense FAQs
What expenses can I claim if I am self-employed?
Potentially allowable costs include office expenses, qualifying business travel, vehicle costs, uniforms, staff costs, stock, business insurance, premises costs, marketing and business-related training. The expense must meet the relevant tax rules.
Can I claim my full phone bill?
Not automatically. Where a phone is used for both business and personal purposes, you normally need to identify the business portion of the cost.
Can I claim mileage if I am self-employed?
Qualifying sole traders and partnerships may be able to use simplified vehicle expenses. For 2026/27, the rate for cars and goods vehicles is 55p per business mile for the first 10,000 miles and 25p thereafter.
Can I claim expenses for working from home?
Potentially. You can calculate an appropriate business proportion of qualifying household costs or, where eligible, use HMRC's simplified working-from-home flat rates.
Can I claim the £1,000 trading allowance and my expenses?
You do not normally deduct actual allowable expenses and capital allowances if you choose to calculate the relevant taxable income using the trading allowance instead.
Do I need receipts for every business expense?
HMRC requires accurate expense records and evidence of costs. You do not normally submit the evidence with the tax return, but you should retain it in case HMRC asks to see it.
Can I claim normal clothes that I wear for work?
Ordinary everyday clothing is generally not allowable simply because you wear it while working. Uniforms and qualifying protective clothing can be treated differently.
HMRC & GOV.UK Sources
This guide is reviewed against current HMRC guidance for self-employed allowable and simplified expenses.
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