Allowable expenses for the self-employed
Self-employed people can deduct costs incurred wholly and exclusively for business from their taxable profit. That covers travel, equipment, premises, professional fees, insurance, marketing and a proportion of home running costs, but not personal expenditure, entertaining clients or ordinary clothing.
The test
An expense is deductible if it was incurred "wholly and exclusively" for the purposes of the trade. Where something has both a business and a private use, you apportion it on a fair and reasonable basis and claim the business share.
That apportionment is where most of the value is. A phone used 70% for work, a car used 60% for work, a spare room used as an office.
What you can claim
| Category | Examples |
|---|---|
| Travel | Mileage at 45p for the first 10,000 miles then 25p, train and bus fares, parking, business-trip accommodation |
| Use of home | A proportion of heat, light, council tax, mortgage interest or rent, and broadband, or HMRC’s flat rate from £10 a month |
| Equipment | Computers, tools, machinery, furniture, usually via the Annual Investment Allowance |
| Premises | Rent, business rates, utilities, insurance, security |
| Professional | Accountancy, legal fees, professional indemnity insurance, trade subscriptions |
| Marketing | Website, advertising, print, trade shows, free samples |
| Staff | Wages, employer National Insurance, pension contributions, subcontractors |
| Finance | Bank charges, interest on business loans, credit card charges on business spend |
What you cannot claim
Client entertaining is never deductible, however legitimate the business reason. Staff entertaining is, within limits.
Ordinary clothing is not deductible even if you only wear it for work. Protective clothing and genuine uniforms are.
Fines and penalties, including parking tickets, are not deductible. Nor is your own drawings, tax, or National Insurance.
Commuting from home to a regular place of work is not business travel. Travel between sites, or to a client, is.
The single most under-claimed item is use of home. If you work from home regularly, claiming the flat rate when the actual apportionment would give you three times as much is leaving money behind.
Expenses before you started trading
Costs incurred in the seven years before you started trading can be claimed as if they were incurred on your first day of trade, provided they would have been deductible had you already been trading. Equipment, website, professional advice, stock.
This guide is general information, current at 9 November 2026. Tax rules change and depend on your circumstances. Please take advice before acting on it.