When you’re self-employed, every business cost comes out of your own pocket — and small expenses add up faster than most people realise.

The good news is that claiming allowable expenses isn’t about being clever. It’s about running a more profitable business by making sure you’re not paying tax on money you didn’t actually keep.

This guide covers the most common allowable expenses UK sole traders can claim, with simple examples so you can track costs properly, reduce stress, and keep more of what you earn.

Friendly Disclaimer: Whilst I am an accountant, I’m not your accountant. The information in this article is legally correct but it is for guidance and information purposes only. Everyone’s situation is different and unique so you’ll need to use your own best judgement when applying the advice that I give to your situation. If you are unsure or have a question be sure to contact a qualified professional because mistakes can result in penalties.

What are self-employed expenses?

Self-employed expenses are the costs you pay to run your business. In simple terms: if you weren’t working for yourself, you probably wouldn’t be paying for them.

Examples include:

• marketing costs
• accounting software
• business insurance
• website hosting
• mileage to visit clients

Allowable expenses reduce your taxable profit — which can mean less tax to pay and more profit kept. The simplest way to avoid overpaying is to track expenses, keep receipts, and only claim costs that are wholly and exclusively for business.

What are allowable expenses for sole traders?

Business expenses fall into two categories:

1. Allowable expenses
2. Disallowable expenses

Allowable expenses are business costs that HMRC lets you deduct from your income when working out your taxable profit. Generally speaking, most of the things you pay for in your business will be an allowable expense.

That said, there are certain business expenses, that even though you may pay for as a result of working for yourself, you cannot claim against your taxes. These are known as disallowable expenses and include:

• Personal expenses
• Certain types of clothing
• HMRC fines and penalties
• Entertaining clients
• Travel from home to office
• Drawings or the salary you pay yourself as a sole trader.

How claiming expenses helps you keep more profit

When you’re self-employed, the tax you pay is based on your profit, not your total income. For tax purposes:

Profit = Income – Allowable expenses

So if your income is £1,000 and your allowable expenses are £400, you’ll pay tax on £600 (not the full £1,000). This is why tracking expenses matters: it’s one of the easiest ways to protect your profit.

Allowable expenses list for UK sole traders (quick checklist)

Here’s a practical list of common allowable expenses for sole traders. If you’re reading this near tax time, it’s worth scanning your bank statements and making sure you haven’t missed anything.

Expense category	Examples
Stock & materials	Stock, raw materials, supplies
Subcontractors & freelancers	Designers, VAs, editors, specialist help
Office / workspace	Office rent, coworking
Website costs	Domain, hosting, themes, plugins
Business travel	Train, parking, hotels (business trips)
Mileage	Business miles in your own car
Vehicle costs (where relevant)	Lease/HP costs (business portion)
Home office	Simplified rate or portion of bills
Clothing (limited)	Branded uniform, safety gear
Food & drink (limited)	Meals while travelling for business
Marketing & advertising	Ads, printing, website promos
Phone & internet	Business use % of bills
Insurance	Public liability, professional indemnity
Trade journals	Industry magazines/subscriptions
Training & courses	Courses to improve existing skills
Business subscriptions	Software, tools, memberships
Professional fees	Accountant, legal, consultancy
Payment processing fees	Stripe, PayPal, card charges
Bank charges	Monthly fees, transfer charges
Bank interest (cash basis)	Interest on business account

Business travel expenses (what counts?)

In general, you can claim travel costs when you’re travelling for business purposes, such as:

• visiting clients (new or existing work)
• seeing suppliers
• overnight stays for business
• travel to training courses

Parking charges are usually allowable, but parking fines are not.

Business mileage (using your personal car)

If you use your personal car for business travel, you may be able to claim mileage using HMRC’s simplified expenses rates.

For most cars, HMRC’s standard mileage rates are:

• 45p per mile for the first 10,000 business miles
• 25p per mile after that

This rate is designed to cover fuel, servicing, tax, MOT and depreciation. You’ll need a simple mileage log as evidence.

Vehicle costs (if you buy or lease a car as a sole trader)

If you buy or lease a vehicle and use it for business, you may be able to claim a business proportion of:

• the purchase cost
• lease payments
• hire purchase payments

How much you can claim depends on how the vehicle is used and how it was purchased.

Home office expenses (working from home)

If you work from home, you may be able to claim a portion of household costs.

There are two common methods:

• Simplified flat-rate (based on hours worked at home)
• Actual cost method (business portion of bills)

Many sole traders choose simplified expenses because it’s quick and easy.

Clothing (what you can and can’t claim)

You can usually claim:

• branded uniforms (e.g. logo clothing)
• protective or safety clothing required for work

You usually can’t claim:

• everyday clothing worn for work (including business suits)

If the clothing could reasonably be worn outside work, HMRC generally won’t allow it.

Food and drink (when it may be allowable)

Food can be a confusing area for sole traders.

In general, you may be able to claim food and drink when you are travelling for business (for example, away from your normal base of work). However, you can’t claim client entertaining, such as taking a client out for lunch.

How to claim expenses on your Self Assessment tax return

You claim allowable expenses in the self-employment section of your tax return.

If your turnover is under £85,000

You may be able to complete a simplified version and enter one total figure for expenses.

If your turnover is over £85,000

You’ll usually need to enter a breakdown of expenses into HMRC categories.

Either way, it’s important to keep a note of:

• what you claimed
• how you calculated it
• your receipts/invoices

This can be done using accounting software or a simple spreadsheet.

What if an expense is partly business and partly personal?

Some expenses are “mixed use”, such as:

• phone and internet
• laptop or equipment
• car usage

In these cases, you can usually claim a business proportion, as long as you can justify how you worked it out.

If you can’t reasonably split the cost between business and personal use, the expense may be disallowed in full under HMRC’s “duality of purpose” rules.

Do you need receipts to claim expenses?

Yes — you should keep evidence of the expenses you claim.

You are legally required to keep business records (receipts and invoices) for 6 years. Receipts protect you if HMRC asks for evidence and make tax time far less stressful.

Common mistakes that lead to overpaying tax

If you want to keep more profit, these are the most common things to avoid:

• Missing small expenses (they add up fast)
• Not tracking subscriptions properly
• Mixing personal and business spending
• Forgetting bank charges and payment fees
• Leaving bookkeeping until the last minute

A simple weekly routine and bookkeeping system usually fixes most of these.

Tools to help you track expenses (and reduce admin)

Tracking expenses doesn’t need to be complicated. The right tools can help you stay organised, reduce admin, and keep more profit.

=> Browse accounting tools for UK sole traders here

FAQs