A self-employed allowable expenses list covers the essential business costs HMRC permits sole traders and partnerships to deduct from total turnover before calculating taxable profit, provided every cost is incurred wholly and exclusively for trade.

Updated for the 2026/27 tax year, it spans office costs to training, with distinct rules for equipment and working from home.

Key takeaways

• Allowable expenses reduce taxable profit; only costs incurred wholly and exclusively for the business qualify.
• Sole traders can claim a £1,000 tax-free trading allowance instead of itemising expenses, but not both.
• Under cash basis accounting, only cars qualify for capital allowances, equipment such as laptops is a normal allowable expense.

What’s on the self-employed allowable expenses list UK?

Nine categories cover almost every cost a sole trader will run into:

• Office costs
• Travel costs
• Clothing expenses
• Staff costs
• Stock and resale goods
• Financial and insurance costs
• Business premises costs
• Marketing and advertising
• Training courses

Office Costs

• Stationery, printing, and postage
• Business proportion of phone and internet bills
• Software subscription fees and software purchased outright for business use

Travel Costs

• Fuel, parking, train, and bus fares for business trips
• Overnight accommodation for business trips
• Excluded: Regular home-to-work commuting

Clothing Expenses

• Uniforms and protective clothing
• Performance costumes
• Excluded: Everyday clothing (even if worn exclusively for work)

Staff Costs

• Employee salaries and wages
• Employer National Insurance
• Pension contributions
• Subcontractor fees

Stock and Resale Goods

• Raw materials
• Goods bought specifically to resell

Financial and Insurance Costs

• Bank charges
• Business insurance premiums
• Interest on business loans or hire purchase agreements

Business Premises Costs

• Rent and business rates
• Utility bills
• Property insurance for business premises
• Excluded: The cost of buying property

Marketing and Advertising

• Website hosting
• Online and print advertising
• Printed promotional materials
• Excluded: Client entertainment

Training Courses

• Courses that maintain or update existing business skills
• Excluded: Training for an entirely new trade

Who Can Claim Self-Employed Allowable Expenses in the UK?

Sole traders and business partners can claim allowable expenses, including people who are self-employed part-time alongside a job. Limited company directors and employees cannot use this list.

A director’s company deducts its own costs for Corporation Tax, and employees follow separate employment expense rules.

Key rules and eligibility boundaries apply depending on your business structure and income type:

• Part-time counts. If you run a side business at weekends, you can still claim its costs. Only costs that belong to the side business qualify, so your commute to your day job stays out.
• Partners share the deduction. The partnership claims the expense once. You don’t claim your own copy on top.
• The trading allowance works differently. The £1,000 trading allowance is not available for income from a partnership, so partners always itemise their expenses.
• Landlords follow a different set of rules. Rental income is taxed as property income, not trading income. The same broad idea applies, in that costs must relate to the letting, but the allowed costs differ. Mortgage interest, for example, is handled through a separate tax reduction rather than as an ordinary expense. If you let property, check HMRC’s property income guidance instead of the list in this article.

What can’t you claim as self-employed?

Returning to the rules for sole traders, the same wholly-and-exclusively rule that allows a claim is also what blocks one, and several disallowed costs catch people out every year.

You cannot claim:

1. Personal drawings or your own salary as a sole trader
2. Client entertaining or hospitality
3. Fines and penalties, including parking tickets and HMRC penalties
4. Everyday clothing, even if bought specifically for work
5. The purchase cost of business premises, as opposed to running costs
6. Commuting between home and a regular place of work
7. Non-business use of a phone, vehicle or internet connection, beyond the business-use proportion

Charitable donations are a frequent stumbling block. Gift Aid relief is claimed as a personal tax deduction on your Self Assessment return rather than a trading expense. HMRC’s helpline, or LITRG’s free guidance, can confirm a specific case.

What’s the Difference Between Allowable, Disallowable and Partly Allowable Expenses?

Allowable expenses are business costs you can deduct in full. Disallowable expenses can never be deducted. Partly allowable expenses are mixed-use costs where you can claim only the business share. Every category is decided by one test: was the cost incurred wholly and exclusively for the business?

Can Capital Allowances Be Claimed if You Are Self-Employed?

Yes, sole traders and partners can claim capital allowances for equipment, machinery, tools, and business vehicles. Your claiming method depends on your accounting system.

From the 2024/25 tax year onwards, Cash Basis accounting is the default method for sole traders and partnerships, though businesses can opt into Traditional Accounting if preferred.

• Cash Basis Accounting: Laptops, tools, and equipment are claimed as normal expenses in the year bought; capital allowances apply specifically to cars.
• Traditional Accounting: Capital allowances apply to all long-term assets using mechanisms like the Annual Investment Allowance (AIA).
• Annual Investment Allowance (AIA): Deducts 100% of qualifying asset costs up to the annual limit in the purchase year.
• Writing Down Allowances (WDA): Deducts a set annual percentage for assets that do not qualify for AIA.

How much can you claim for working from home?

Two methods exist for working-from-home allowable expenses, and the flat-rate option is the simpler of the two:

Hours worked from home per month	Flat rate you can claim
25 to 50	£10 per month
51 to 100	£18 per month
101 or more	£26 per month

This flat rate covers heating and electricity (gas and lighting), but it does not include council tax, rent, water, telephone, or broadband bills. You can still calculate and claim the business proportion of your phone and broadband costs alongside this flat rate.

The alternative is calculating the actual business proportion of heating, electricity, council tax, and internet costs, based on rooms used and time worked, often more accurate, but far more record-keeping. HMRC’s simplified expenses guidance sets out both methods in full.

Should you claim expenses or use the £1,000 trading allowance?

If total allowable expenses come to less than £1,000, the trading allowance is usually the simpler choice, it’s a flat, tax-free deduction that needs no itemising or receipts. Once expenses exceed £1,000, itemising them individually almost always saves more tax.

The two cannot be combined: it’s one or the other for the tax year. HMRC’s guidance on tax-free allowances confirms the £1,000 threshold and how it interacts with expense claims.

How do you claim allowable expenses on your Self Assessment return?

To claim allowable expenses and reduce your taxable profit on your UK tax return, follow these four steps:

1. Keep receipts, invoices, or HMRC mileage logs for every business cost throughout the year.
2. Total the costs by category at the end of the tax year.
3. Enter the totals in the expenses section of the Self Assessment return.
4. Retain the records for at least five years after the 31 January submission deadline of the relevant tax year, in case HMRC asks to see them.

No receipts need to be submitted with the return itself, but without them, a claim can be reduced or refused if HMRC ever checks.

How to Maximise Your Allowable Expense Claims?

To get the full tax benefit from allowable expenses, focus on accurate year-round tracking, precise personal-use calculations, and choosing the deduction method that produces the highest legitimate tax saving.

• Track Every Cost: Record all receipts, invoices, and out-of-pocket expenses year-round.
• Split Dual-Use Costs: Claim the exact business proportion of shared costs like mobile contracts, broadband, and car running costs.
• Compare Expenses vs. Trading Allowance: Itemise expenses to ensure they exceed the £1,000 trading allowance before claiming.
• Evaluate Home Office Options: Compare HMRC’s flat rate (£10–£26/month) against your actual proportional utility costs to see which is higher.
• Log Business Mileage: Claim standard approved rates (45p/mile for the first 10,000 miles; 25p thereafter) if it beats actual fuel and upkeep costs.

If you use other business vehicles, flat rates are 24p per mile for motorcycles and 20p per mile for bicycles.

 

Conclusion

Claiming the right allowable expenses directly reduces your taxable profit, and consequently, your final tax bill. Review your approach to equipment purchases and the £1,000 trading allowance annually, as HMRC’s specific rules and thresholds can change from one tax year to the next.

Disclaimer: Lending and tax rules vary by individual circumstances. Figures in this article reflect HMRC guidance published as of September 2026; readers should confirm current rates directly with HMRC or gov.uk before filing a return.

FAQs

What expenses are deductible for self-employed people?

Deductible self-employed expenses are the costs on the self-employed allowable expenses list above: office, travel, staff, premises, marketing, and similar trading costs. Anything not wholly and exclusively for the business is excluded.

Do you need receipts for your expenses?

Yes. Receipts aren’t sent with the tax return, but HMRC can request them for up to five years afterwards. Without evidence, a claimed expense can be disallowed.

Can you claim expenses if you use the trading allowance?

No. The £1,000 trading allowance and itemised expenses can’t be combined, choosing the allowance means giving up the right to deduct any expenses that year.