What Business Expenses Can Self-Employed People Claim?

With the 31st January 2026 Self-Assessment deadline fast approaching, there’s no better time to ensure you’re claiming all the business expenses you’re entitled to.

For self-employed professionals, understanding allowable expenses can make a substantial difference to your tax bill. Many either overclaim, risking a penalty or notice by HMRC, or underclaim, paying more tax than is necessary.

At Hamlyns, we regularly help our self-employed clients navigate the complexities of allowable business expense claims, ensuring they maximise deductions that they’re entitled to, whilst remaining fully compliant with HMRC requirements.

In this guide, we’ll explain which expenses you can claim as a self-employed professional, clarify common grey areas, and emphasise the importance of accurate record-keeping for your January tax return.

Distinguishing Between Allowable and Non-Allowable Expenses

You can claim tax relief on expenses that are incurred “wholly and exclusively” for business purposes. These are known as allowable expenses, and reduce your taxable profit, in turn reducing the tax you owe.

However, the phrase “wholly and exclusively” is pivotal. If an expense has any element of personal use, you can only claim the business proportion.

This is where many self-employed individuals make mistakes, either by claiming personal expenses or failing to claim legitimate business costs because they’re unsure.

Allowable expenses are costs that directly relate to running your business. Non-allowable expenses include personal costs and anything not genuinely required for your trade.

The Trading Allowance

Before exploring specific expense categories, it’s worth mentioning the Trading Allowance. If your self-employed income is modest, you can claim a flat £1,000 tax-free allowance instead of calculating actual expenses. This means if you earn up to £1,000 from self-employment, you pay no income tax or National Insurance, and don’t need to keep detailed records. Sole traders qualify for this allowance, but if you claim the Trading Allowance, you cannot claim any other business expenses. For most self-employed professionals with expenses exceeding £1,000 every year, the Trading Allowance simply won’t suffice.

Types of Allowable Expenses

Office Equipment

These categories are allowable as expenses:

• Office equipment like computers, laptops, printers, essential software and tools
• Stationery, postage labels, stamps, printer ink and cartridges
• Office furniture like chairs, sofas, desks, and more

Larger equipment purchases like vehicles or machinery, you may need to claim these as capital allowances rather than standard expenses.

Professional Services 

The following services qualify as allowable expenses:

• Fees paid to solicitors, surveyors, architects, bookkeepers, accountants and business advisers
• Bank charges, overdraft interest, credit card fees for business accounts and interest on business loans
• Staff, subcontractor and agency worker salaries, bonuses, pensions, employer NICs and related costs

Travel and Vehicle Expenses

The following travel costs are allowable:

• Train, bus, taxi and airline costs
• Accommodation for business trips
• Travel to and from temporary workplaces or client sites
• If using a vehicle for business, actual costs for fuel, insurance, repairs, breakdown cover, services and MOTs can be claimed by using the business-use proportion or HMRC’s simplified mileage allowance
• Parking fees, congestion charges, toll fees related to business journeys

Commuting costs, parking fines and speeding tickets are, however, not allowable.

Stock, Materials, and Direct Costs

If you purchase goods for resale or raw materials to create products, these costs are fully allowable. This includes items bought specifically for your business to then sell on via websites like eBay.

Marketing and Professional Subscriptions

Legitimate marketing and advertising costs can be claimed, including web hosting and development, domain names, social media advertising, printing and promotional merchandising. Membership fees for professional trade bodies and industry journal subscriptions are also allowable.

Many client entertainment activities, however, which may be considered ‘marketing’, are generally not allowable. This is a common area of confusion for many business owners, so it’s worth clarifying.

Clothing and Protective Wear

You cannot claim for everyday clothing, even if you only wear it for work. A suit purchased for client meetings, for example, is not allowable.

However, you can claim for uniforms that clearly identify your profession, specialist protective clothing required for your work (such as hi-vis jackets, hard hats, or safety boots), and costumes if you’re an entertainer. You can also claim laundry costs for uniforms or protective clothing.

Business Insurance and Financial Protection

Premiums for business insurance policies, including public liability, professional indemnity, employer’s liability, and goods in transit cover, are all allowable expenses.

The Grey Area of Working from Home Expenses

Many self-employed professionals work from home, raising questions about what proportion of household bills can be claimed.

Put simply, you can only claim the business-use portion of costs such as heating, electricity, water, Council Tax, internet and telephone bills.

For mortgage or rent payments, only the interest portion (not capital repayments) can be claimed proportionally. You need to calculate a realistic business-use percentage based on either the proportion of your home used for work or the time spent working from home.

HMRC offers simplified expenses for working from home where you can claim a flat rate based on hours worked every month. This avoids complex calculations but may be less beneficial if your actual costs are higher.

What About Business Use of Personal Assets?

This is another common area of confusion. Many question whether using personal assets partly for business activities are allowable expenses. For example, your mobile phone, home broadband, or personal vehicle might serve both personal and business purposes.

In these cases, you are entitled to make a reasonable estimate of the business proportion and only claim that amount.

For example, if you estimate 60% of your mobile phone usage relates to business, you can claim 60% of the monthly bill. Keep records of how you reached this estimate in case HMRC queries it. Being realistic and conservative in your estimates is sensible, as ambitious claims may trigger an HMRC investigation.

The Importance of Proper, Thorough Record-Keeping

It’s one thing to claim expenses, but maintaining proof is equally vital.

HMRC requires you to keep records for at least five years after the 31st of January submission deadline. These records should include invoices, receipts, bank statements, mileage logs, and any documents supporting your expense claims.

Whilst you don’t submit these records specifically with your SA tax return, HMRC can request them at any time. If you cannot provide adequate evidence, they may disallow expenses and charge additional tax, interest, and penalties.

Cloud-based accounting software makes record-keeping exponentially easier, allowing you to categorise expenses, upload receipts, and generate reports easily. Many self-employed professionals find this investment more than pays for itself through saved time and resources, and improved accuracy.

Common Business Expense Mistakes to Avoid

Several expense-claiming errors are particularly common:

• Claiming personal expenses without calculating the business proportion (e.g., your entire home broadband bill)
• Failing to make claims that you’re entitled to, such as recurring costs, licences and equipment purchases, meaning your tax bill is higher than necessary
• Poor record-keeping which means claims can’t be substantiated when questioned, even if expenses were allowable
• Claiming capital items incorrectly as standard expenses

It’s worth noting that Making Tax Digital for Income Tax will affect self-employed individuals from April 2026 onwards. This means maintaining digital records and submitting quarterly updates to HMRC, rather than one annual tax return. Getting organised with digital record-keeping now will make this transition considerably smoother.

How Hamlyns Can Support You

With the January deadline approaching, now is the ideal time to review your expenses and ensure your tax return is accurate, optimised and, most importantly, convenient for you.

At Hamlyns, our experienced chartered accountants help self-employed professionals across Surrey and beyond to:

• Identify all allowable expenses you may have overlooked
• Calculate complex proportions for mixed-use assets and home working
• Implement efficient record-keeping systems
• Ensure full compliance with HMRC requirements
• Prepare and submit accurate Self-Assessment returns
• Provide ongoing support and advice throughout the year

Don’t leave your tax return to the last minute or risk overpaying tax by missing expenses you may be entitled to. Contact Hamlyns today to discuss how we can help you navigate your tax obligations efficiently and compliantly.