Allowable Expenses for the Self-Employed UK
Quick answer
An allowable expense is a cost incurred wholly and exclusively for your business that you can deduct from your income to lower your taxable profit. It is not a refund: a GBP 100 expense cuts a basic-rate sole trader's tax bill by about GBP 26 (20% Income Tax plus 6% Class 4 NIC), not GBP 100.
Allowable expense categories and what you can claim (2026/27)
| Category | What you can claim |
|---|---|
| Office costs | Stationery, phone and broadband bills, postage, printer ink and the business share of software |
| Travel costs | Fuel, parking, train, bus, air and taxi fares, hotel rooms and vehicle running costs (not your normal commute) |
| Clothing | Uniforms, branded kit, protective clothing and costumes only - not ordinary clothes you could wear day to day |
| Staff costs | Salaries, subcontractor costs, wages, bonuses, pensions, benefits and agency fees |
| Stock and materials | Goods you buy to resell, raw materials and direct production costs |
| Financial costs | Business insurance, bank and credit-card charges, overdraft and loan interest, and accountant or bookkeeper fees |
| Premises costs | Rent, business rates, utilities, property insurance and security for business premises |
| Advertising and marketing | Website costs, advertising, mailshots, free samples and directory listings |
| Training courses | Courses that keep your existing skills up to date or relate to your current business (not learning a brand-new trade) |
| Use of home | A reasonable share of heat, light, power, rent or mortgage interest, Council Tax and broadband - or the flat rate (see below) |
| Capital items | Equipment, tools, machinery and most vehicles are claimed as capital allowances, not as everyday running costs |
Step by step
- 1
Apply the wholly-and-exclusively test
A cost is only allowable if it was incurred wholly and exclusively for your business. If it has a clear personal benefit baked in, such as ordinary clothes or a meal you would have eaten anyway, it fails the test and you cannot claim it.
- 2
Apportion anything used for both business and personal reasons
For mixed-use items such as your phone, car or home, claim only the business share. If a quarter of your phone use is for work, claim a quarter of the bill, and keep a note of how you worked the split out.
- 3
Decide between actual costs and simplified expenses
For vehicles and use of home you can claim actual costs, or use HMRC flat rates instead: 55p a mile for the first 10,000 car or goods-vehicle miles in 2026/27 then 25p (24p for motorcycles), and GBP 10, GBP 18 or GBP 26 a month for working from home. Pick whichever gives the bigger, fairer claim.
- 4
Separate capital items from running costs
Equipment, tools, machinery and most vehicles are not everyday expenses; you claim them as capital allowances, often in full in the year you buy them under the Annual Investment Allowance. Claiming them in the wrong box is a common error.
- 5
Compare your expenses against the GBP 1,000 trading allowance
If your total allowable expenses for the year are below GBP 1,000, you can deduct the flat GBP 1,000 trading allowance instead. You can claim the allowance or your actual expenses, never both, so use whichever is larger.
- 6
Keep the records that back every figure
Record all income and expenses and keep the evidence for at least five years after the 31 January filing deadline. HMRC can ask you to prove any amount you claimed, and padding expenses is both fraud and, since you only save a fraction in tax, a poor trade.
The lists of what counts as an allowable expense are everywhere; what readers actually need is the number that follows. An allowable expense is not money back in your pocket. It is a cost you deduct from your income so that you are taxed on a smaller profit. At 2026/27 rates a genuine GBP 100 expense cuts a basic-rate sole trader's bill by roughly GBP 26 (20% Income Tax plus 6% Class 4 National Insurance), and a higher-rate trader's by about GBP 42 (40% plus 2%). That is why claiming everything you are entitled to matters, and also why inflating expenses is both fraud and a bad deal: you risk a penalty to save pennies in the pound.
The table above is the full HMRC category list at a glance. Two rules sit underneath all of it. First, the cost must be wholly and exclusively for the business. Second, anything you use for both work and personal life, your phone, your car, your home, must be split so you only claim the business share. For vehicles and use of home you can skip the apportionment maths and use HMRC's flat rates instead: 55p per mile for the first 10,000 car or goods-vehicle miles in 2026/27 (then 25p, and 24p for motorcycles), and GBP 10, GBP 18 or GBP 26 a month for working from home depending on the hours. If your whole year's expenses come to less than GBP 1,000, the GBP 1,000 trading allowance is the simpler alternative; you claim that or your actual expenses, never both.
Expenses are one piece of the wider picture. They reduce the profit taxed in our self-employed tax guide, which feeds the bills covered in payments on account, and you enter them on the return walked through in our Self Assessment tax return guide.
Figures are for the 2026/27 tax year and are taken from gov.uk; tax rules, rates and thresholds can change. This is general information, not financial or tax advice.
Frequently asked questions
What expenses are deductible when self-employed?
Costs incurred wholly and exclusively for your business: office costs, business travel, uniforms and protective clothing, staff wages, stock and materials, business insurance and bank charges, premises costs, advertising, relevant training and a share of working from home. Equipment and vehicles are usually claimed as capital allowances instead.
What expenses can I claim without receipts in the UK?
There is no expense you can claim with no record at all - HMRC can ask you to prove any figure, and you must keep records for at least five years after the 31 January filing deadline. Simplified flat rates (mileage and use of home) let you avoid itemising every receipt, but you still need a record of the business miles or hours behind them.
Can I claim for lunch if self-employed?
Usually no. The cost of everyday meals while working is treated as a normal living cost, not a business one, so it is not allowable. You can claim subsistence on a genuine business trip away from your usual area of work, such as an overnight stay, where the meal is a reasonable cost of the journey.
What are HMRC allowable expenses?
They are costs HMRC accepts as incurred wholly and exclusively for the purposes of your trade, which you deduct from your income to work out the taxable profit you pay Income Tax and Class 4 National Insurance on. Mixed-use costs must be split, with only the business portion claimed.
What expenses can I write off self-employed?
You cannot write the full cost off your tax bill - an allowable expense reduces your taxable profit, not your tax pound for pound. At 2026/27 rates a basic-rate sole trader saves about 26p of tax for every GBP 1 of genuine expense (20% Income Tax plus 6% Class 4 NIC), and a higher-rate trader about 42p (40% plus 2%).
Sources
Save these facts
View the key facts as a shareable graphic.
General information, not financial advice. Tax rules and figures can change; check the current position on gov.uk before acting.