Allowable expenses for sole traders: a plain-English guide
What self-employed people can and cannot claim as allowable expenses, from vans and tools to work clothing and working from home, with HMRC's rules and simplified flat rates.
5 min read
If you work for yourself, every legitimate business cost you record lowers the profit you pay Income Tax on. GOV.UK's example: turnover of £40,000, allowable expenses of £10,000, and tax is worked out on £30,000. Every cost you forget to record, you pay tax on as if it were profit.
This guide covers what HMRC counts as an allowable expense if you are a sole trader or a partner in a business partnership, and where people most often get it wrong.
The basic rule
You can claim costs related to running the business. You cannot claim personal spending, and money you take out of the business for yourself is not an expense.
Where something is used for both, you claim the business part only. GOV.UK's example is a £200 phone bill with £70 of business calls: you claim £70.
One trap first. If you use the £1,000 tax-free trading allowance, you cannot claim expenses or capital allowances at all. It is one or the other.
What you can claim, by category
| Category | You can usually claim | You cannot claim |
|---|---|---|
| Office and equipment | Stationery, postage, printing, phone and internet bills, software used for less than 2 years or on a renewing licence | Non-business use of phones or premises |
| Premises | Rent, business rates, utilities, insurance, repairs and maintenance | The private part of a home |
| Vehicles and travel | Fuel, insurance, repairs and servicing, parking, vehicle tax, breakdown cover, train, bus, air and taxi fares, hotels, meals on overnight business trips | Fines, non-business travel, travel between home and work |
| Clothing | Protective clothing, overalls used only for work, uniforms, costumes | Everyday clothing, even if you only wear it for work |
| Staff | Salaries, subcontractors, employer's National Insurance, pensions, agency fees, relevant training | Carers or domestic help, such as nannies |
| Stock and materials | Goods for resale, raw materials, direct production costs | Goods for private use, depreciation |
| Legal and financial | Accountants, solicitors, professional indemnity insurance, bank charges, loan and hire purchase interest | Loan repayments, fines, legal costs of buying property or machinery |
| Marketing | Advertising, website costs, promotional items with your logo up to £50 per recipient per year | Food, drink or tobacco as gifts, client entertaining |
| Subscriptions | Trade or professional journals and bodies | Gym membership, political parties, charity donations |
| Training | Courses that keep your existing skills current | Courses to start a new business or move into an unrelated area |
Equipment: expense or capital allowance?
Things you keep and use in the business, such as a laptop, a mitre saw or a van, depend on how you do your accounts.
- With cash basis accounting, you claim most equipment as an allowable expense. Cars are the exception: a car is claimed through capital allowances, unless you use simplified expenses for it.
- With traditional accounting, equipment, machinery and vehicles are claimed as capital allowances instead.
If you are not sure which basis you use, your accountant will be, and you can check HMRC's guidance on cash basis.
Vehicles: actual costs or the flat rate
For cars, vans and motorcycles you can either add up the real costs of running the vehicle (fuel, insurance, repairs and the rest) or use simplified expenses: a flat rate per business mile instead.
From 2026/27 the flat rate for cars and vans is 55p a mile for the first 10,000 business miles and 25p after that; motorcycles are 24p. You cannot use it for a vehicle you have already claimed capital allowances on, and once you use it for a vehicle you keep using it for as long as that vehicle is in the business. Parking and other travel, such as trains, can still be claimed on top.
Either way you need a log of business journeys. HMRC mileage rates explained (2026/27) covers the rates and the records in more detail.
Working from home
You can claim a share of household running costs, such as heating, electricity, Council Tax, mortgage interest or rent, and internet and phone use, split by a reasonable method like rooms used or time spent.
GOV.UK's worked example: four rooms, one used only as an office, an electricity bill of £1,120. That gives £280 as an allowable expense. Work there only one day a week, and it is £40.
If that sounds like more arithmetic than it is worth, simplified expenses offer a flat monthly rate instead, if you work at least 25 hours a month from home:
| Hours of business use a month | Flat rate a month |
|---|---|
| 25 to 50 | £10 |
| 51 to 100 | £18 |
| 101 or more | £26 |
The flat rate does not cover phone or internet; you can still claim the business share of those separately.
Keep the proof
You do not send receipts with your Self Assessment return; you list your allowable expenses for the year. But you must keep records and proof, such as receipts, bank statements and invoices, so you can show HMRC if asked. For how long, see how long to keep receipts for HMRC. If you are VAT-registered, the receipt also has to do a second job; what counts as a valid VAT receipt explains what it needs to show.
If you are not sure whether a cost is allowable, GOV.UK's advice is to ask HMRC. An accountant is the other sensible option.
How ClaimSnappy helps
ClaimSnappy is built to catch costs at the moment you spend. You snap the receipt and it is filed with the date, amount and VAT read from it; you track journeys and each one is priced at the rate for its tax year. If one receipt mixes business and personal items, you can split it, and a split with no personal part is flagged so you can check it.
At month end the app prepares a tidy record of the month for you to check. If an accountant does your return, they can take it as PDF or CSV, or as import files for Xero, QuickBooks Online and Sage 50. ClaimSnappy keeps the records; deciding what is allowable, and what goes on your return, stays with you and your accountant.
Sources
Checked against these on 14 October 2026.