Allowable expenses for the self-employed

Claiming the right expenses reduces your tax bill — but only if they’re genuinely for your business. Here’s what you can claim, and what to avoid.

Updated July 2026 · A general guide, not personal tax advice.

The rule of thumb

You can deduct costs that are wholly and exclusively for your business. If something is part personal, part business (like a phone), you claim only the business proportion.

Common allowable expenses

• Stock, materials and direct costs of what you sell
• Office costs, software, phone and internet (business share)
• Travel and business mileage (see below)
• Tools and equipment; work clothing like uniforms or PPE
• Marketing, professional fees, insurance and bank charges
• A reasonable amount for using your home as an office

What you generally can’t claim

• Everyday clothing, client entertaining, and fines/penalties
• The personal share of any mixed-use cost
• Capital items may follow capital-allowance rules rather than a simple deduction

Trading allowance, mileage & simplified expenses

There’s a £1,000 trading allowance: earn under it and you may not need to report the income; earn over and you can deduct the £1,000 instead of actual expenses if that’s better. For vehicles you can use simplified mileage at HMRC’s flat rates (e.g. 45p/mile for the first 10,000 business miles by car) or claim actual costs — but not both. Try the mileage calculator.

Keep the evidence

Whatever you claim, keep the receipts and records — digitally, once you’re within Making Tax Digital. FTrak captures receipts with OCR and categorises them to the right tax boxes automatically.