What expenses can I claim as a UK self-employed person?

Anything incurred wholly and exclusively for the business: office costs, business travel, use of home as office, equipment (via capital allowances or Annual Investment Allowance), professional fees, insurance, marketing, financial costs (bank, loan interest). Most expenses are claimed on the SA103 Self-Employment supplementary page of your tax return. The £1,000 Trading Allowance is an alternative for very small earnings.

Can I claim home office expenses as self-employed?

Yes. Two methods: simplified flat rate (£10/£18/£26 per month based on hours worked at home), or actual costs (apportioned share of gas, electric, council tax, mortgage interest, water, repairs). The simplified rate is easier and lower-audit-risk. Choose whichever gives the bigger deduction for your situation.

Is mileage 45p per mile?

45p per mile for the first 10,000 business miles each tax year, then 25p per mile beyond. This is the simplified rate covering all vehicle running costs (fuel, insurance, MOT, repairs, depreciation). Alternative: claim actual costs apportioned by business mileage - usually only better than simplified if you have a very expensive vehicle and modest mileage.

Allowable expenses for UK self-employed 2026/27

Last reviewed by the UK Tax Drag editorial team · 12 May 2026 · How we review · Next review due 12 November 2026 · See what changed · Report an error

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What you need to know: Allowable expenses for UK self-employed - 2026/27

Quick answer: UK self-employed people can deduct any business expense that meets HMRC’s "wholly and exclusively" for the business test. Categories include : office costs (stationery, software, postage), business travel (vehicle, public transport, accommodation), staff costs, professional fees, equipment (often via capital allowances), use of home as office, marketing, financial costs (bank charges, interest),…

Key points:

Mobile phone: apportion between business and personal calls. A reasonable apportionment based on call/data logs is required.
Broadband: apportion if used for both business and personal. Many self-employed claim 70-80% business if work-from-home is regular.
Software subscriptions: 100% deductible if exclusively for business (e.g. Adobe Creative Cloud for a designer, Xero for accounting).

UK self-employed people can deduct any business expense that meets HMRC’s "wholly and exclusively" for the business test. Categories include: office costs (stationery, software, postage), business travel (vehicle, public transport, accommodation), staff costs, professional fees, equipment (often via capital allowances), use of home as office, marketing, financial costs (bank charges, interest), training (subject to restrictions). The £1,000 Trading Allowance is an alternative to claiming expenses for small earnings. Most expenses are claimed on the SA103 Self-Employment supplementary page.

The "wholly and exclusively" test

HMRC’s test under ITTOIA 2005 s.34 has two parts:

The expense must be incurred wholly for business purposes
It must be incurred exclusively for business purposes

"Wholly and exclusively" doesn’t mean the expense must be exclusively necessary - it means it must be exclusively for business use. Where an expense has a mix of business and personal use (a phone, a car, a home office), the business portion is deductible if it can be identified separately or fairly apportioned.

The "duality of purpose" trapAn expense that serves both business and personal purposes simultaneously - with no clear apportionment - is not deductible at all. Classic example: business clothing that you would also wear outside work (a suit) is not deductible. A uniform or protective gear is deductible.

Category 1: Office costs

Stationery, printing, postage, telephone, internet (apportioned), business software and subscriptions, business rates, rent for business premises.

Mobile phone: apportion between business and personal calls. A reasonable apportionment based on call/data logs is required.
Broadband: apportion if used for both business and personal. Many self-employed claim 70-80% business if work-from-home is regular.
Software subscriptions: 100% deductible if exclusively for business (e.g. Adobe Creative Cloud for a designer, Xero for accounting).

Category 2: Business travel

You can deduct travel costs between business locations, to customer sites, or for business meetings. You cannot deduct commuting between home and a regular workplace.

Method	Allowable cost
Vehicle: simplified mileage	45p/mile for first 10,000 miles; 25p/mile beyond. Includes all running costs.
Vehicle: actual costs	Apportioned fuel, insurance, repairs, MOT, depreciation. Requires logging business/personal split.
Public transport	Full cost (rail, bus, taxi) for business journeys
Flights	Economy fares; first/business class only if business-necessary
Accommodation	Hotels on business trips, reasonable subsistence
Subsistence (food/drink)	Allowable when travelling on business away from regular base for more than 5 hours; not lavish

Worked example: vehicle methodology choice

Ravi runs a plumbing business, drives a van. Business miles per year: 18,000. Annual vehicle costs: fuel £3,500, insurance £900, repairs £600, MOT £55, capital allowance £1,200. Total: £6,255.

Simplified mileage: 10,000 × 45p + 8,000 × 25p = £4,500 + £2,000 = £6,500
Actual cost method: £6,255 × (18,000 / 20,000 total miles) = £5,629
Better choice: simplified mileage (saves £871/year)

Once you’ve chosen a method for a vehicle, you cannot change for that vehicle until you replace it. Choose carefully in year 1.

Category 3: Use of home as office

You can claim a portion of home costs if you work from home regularly. Two methods:

Simplified flat-rate method

Hours/month worked at home	Flat deduction
25-50 hours	£10/month (£120/year)
51-100 hours	£18/month (£216/year)
101+ hours	£26/month (£312/year)

Actual cost method

Calculate proportion of home used for business (typically rooms used × hours used). Apply that proportion to: gas, electricity, water, council tax, mortgage interest (NOT capital repayment), insurance, repairs to the business area.

Don’t claim mortgage capital repayment - only interest.HMRC clearly distinguishes between mortgage interest (deductible apportioned) and capital repayment (not deductible). Also: claiming home as office can trigger Business Rates and CGT on the business portion of your home when you sell - usually small but worth knowing.

Category 4: Equipment - capital allowances

Equipment costing more than ~£200 typically falls under capital allowances rather than ordinary expenses. The Annual Investment Allowance (AIA) provides 100% first-year relief on most plant and machinery purchases up to £1m per year.

Asset type	Treatment
Computer, laptop, monitor	AIA - 100% first-year
Office furniture	AIA - 100% first-year
Tools and trade equipment	AIA - 100% first-year
Cars (low emission)	First Year Allowance varies
Cars (other)	Writing Down Allowance 6%-18% reducing balance
Property fixtures (integral)	WDA 6% special rate pool

For most small businesses, AIA covers everything - you simply deduct 100% of the purchase in the year of acquisition.

Category 5: Professional fees

Accountancy: always allowable
Legal fees: business-related only (capital legal fees on property purchase are NOT deductible against income)
Professional indemnity insurance: allowable
Professional body subscriptions: allowable for HMRC-approved bodies (gov.uk "List 3")
Bookkeeper / virtual assistant: allowable
Marketing / advertising: allowable; PR campaigns; business cards; website hosting; social media advertising

Category 6: Financial costs

Bank charges on business account: allowable
Business credit card interest: allowable
Business loan interest: allowable
Bad debts written off: allowable when specific debt becomes irrecoverable
Foreign exchange losses: allowable if business-incurred

The £1,000 Trading Allowance - simpler alternative

For very small earnings, claim the Trading Allowance insteadIf your gross trading income is up to £1,000, you can claim the Trading Allowance and pay no tax - no need to register for Self Assessment in many cases. If gross income is £1,000-£X, you can choose either £1,000 Trading Allowance OR actual expenses, whichever is higher. Above £X where actual expenses exceed £1,000, switch to claiming actual.

What is NOT allowable

Client entertainment (business meals, drinks, events for non-employees)
Penalties and fines (parking, late tax, HMRC penalties)
Charitable donations (claim via Gift Aid personally, not via business)
Personal clothing (unless protective/uniform)
Gym membership, even if "for health"
Most political donations
Capital repayment on loans (only interest)
Personal pension contributions (claim personally, not via business)

Calculate your self-employed tax bill

The sole trader tax calculator lets you enter income and expenses to see your tax position before and after claiming allowable costs.

Open the sole trader calculator

Sources and references

"Wholly and exclusively" test from gov.uk expenses if self-employed and ITTOIA 2005 s.34. Capital allowances and AIA from gov.uk Capital Allowances. Vehicle simplified mileage rates from gov.uk simplified expenses. Trading Allowance from gov.uk Trading Allowance.

UK Tax Drag is educational and not regulated financial, tax, legal or business advice - see the disclaimer for the full position. Always verify current rates and rules at the original government sources before acting.

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