The short answer: allowable expenses are the everyday costs of running your business that you can deduct from your income before working out your tax. Claiming the right ones lowers your tax bill. Claiming the wrong ones can cause problems, so it helps to know the rules.
The main categories
HMRC groups allowable expenses for self-employed people into these categories:
- Office costs, such as stationery or phone bills
- Travel costs, such as fuel, parking, and train or bus fares
- Clothing expenses, such as uniforms
- Staff costs, such as salaries or subcontractor costs
- Things you buy to sell on, such as stock or raw materials
- Financial costs, such as insurance or bank charges
- Costs of your business premises, such as heating, lighting or business rates
- Advertising or marketing, such as website costs
- Training courses related to your business
What you cannot claim
Money you take out of your business for personal use is not an allowable expense. Nor are costs that have nothing to do with the business.
Costs that are part business and part personal
When something is used for both, you can only claim the business part. For example, if your mobile phone bills come to £200 and £70 of that is for business calls, you can claim the £70. The same idea applies to costs such as a car, a phone or part of your home. Keep a simple record of how you split the cost.
The trading allowance: an alternative to claiming expenses
If your self-employed income is small, you may be able to use the £1,000 tax-free trading allowance instead of claiming expenses. The catch is that you cannot claim any actual expenses if you use it. It tends to suit people with a little side income and very few costs. Which route is better depends on your figures, so ask us before you choose.
Simplified expenses
HMRC offers simplified flat rates for some costs, such as vehicle mileage, as an alternative to working out the exact figures. Once you use flat rates for a vehicle, you must keep using them for as long as you use that vehicle in the business. See gov.uk for the current rules and rates.
Keep your records
To claim an expense you should be able to show it. Keep receipts, invoices and bank statements. Sole traders need to keep business records for at least five years after the 31 January submission deadline for the relevant tax year. Our guide on what to bring to your accountant has a full checklist.
What about limited companies?
A limited company deducts business costs in its own accounts, and the treatment of some costs is different from a sole trader's. If you run a company and are not sure whether something counts, ask us before you buy.
Sources: gov.uk, expenses if you are self-employed, and tax-free allowances on property and trading income, checked 25 September 2026.
Common questions
Can I claim for working from home?
You may be able to claim part of your home running costs, or a flat rate, if you use your home for business. The rules depend on how you use it, so ask us.
Can I claim my everyday clothes?
HMRC lists uniforms as an allowable expense. Ordinary everyday clothing is generally not allowed. Ask us if you are unsure.
Do I need receipts for everything?
You should keep evidence for every expense you claim, such as receipts, invoices and bank statements. Cloud accounting software can store them digitally.
General information only, not personal advice. Tax rules, rates and thresholds change, so check gov.uk or speak to us about your own situation.