What Expenses Can I Claim as Self-Employed in the UK?

UK self-employed people can claim expenses that are “wholly and exclusively” for business purposes — meaning the expense must be entirely or proportionally for the business, not for personal use. Allowable categories include office equipment, business travel (but not commuting), training, professional subscriptions, insurance, a share of home utility costs when working from home, vehicle expenses, and marketing. You deduct allowable expenses from gross income to calculate taxable profit. If your expenses are below £1,000, claim the £1,000 trading allowance instead.

This is a comprehensive guide for 2026/27.

The basic rule: wholly and exclusively

HMRC’s test for allowable expenses:

• The expense must be “wholly and exclusively” for business purposes.
• Or, if used partly personally, only the business proportion is claimable.

So a £1,000 laptop used 70% for business and 30% personal would have £700 claimable as business expense.

The rule excludes:

• Personal living costs.
• Costs of getting to your usual place of work (commuting).
• Expenses that benefit you personally even if marginally related to business.

Categories of allowable expenses

Office and equipment

• Computers, laptops, tablets for business use.
• Software subscriptions (Microsoft 365, Adobe Creative Cloud, accounting software).
• Stationery and printing.
• Books and reference materials related to the business.
• Office furniture for working from home or office.

For equipment that lasts more than a year (e.g. computer), you typically claim capital allowances or use the Annual Investment Allowance (AIA) — up to £1 million per year, 100% relief in the year of purchase. For small businesses this means most equipment purchases get full tax relief immediately.

Business travel

• Mileage: 45p per mile for the first 10,000 miles, 25p thereafter (own car). 24p per mile for motorbikes. 20p per mile for bicycles.
• Public transport: train, bus, taxi for business journeys.
• Accommodation: hotels when traveling for business.
• Subsistence: meals while traveling away from home for business.
• Tolls and parking.

What’s NOT claimable:

• Commuting between home and your usual place of work.
• Mixed-purpose journeys (only the business portion claimable).

Vehicle expenses (alternative to mileage)

Instead of mileage, you can claim actual vehicle costs:

• Insurance.
• Road tax.
• MOT and servicing.
• Fuel.
• Parking and tolls.
• Capital allowances on the vehicle purchase.

You apportion personal vs business use (e.g. 70% business use means 70% of costs are claimable).

You must use one method consistently for each vehicle. Most freelancers use simplified mileage as it’s simpler and often more generous.

Working from home

If you work from home, you can claim a share of household running costs:

Method 1: Flat-rate (simpler)

HMRC’s simplified expenses give a flat monthly amount based on hours worked from home:

• 25–50 hours/month: £10/month.
• 51–100 hours/month: £18/month.
• 101+ hours/month: £26/month.

You don’t need to track utility costs separately.

Method 2: Apportion actual costs (more detailed)

Calculate proportional share based on:

• Number of rooms used for business vs total rooms.
• Hours of use for business vs total.

Apply to:

• Electricity and gas.
• Water rates.
• Council tax (proportional share for a non-trading-room).
• Mortgage interest (proportional share — be careful, this can affect Capital Gains Tax on the property).
• Rent (if renting).
• Cleaning costs.
• Broadband (proportional share).

Method 2 is more work but can give a higher claim for those with significant home-office usage.

Telephone and internet

For dedicated business phones and broadband: 100% allowable.

For shared personal/business lines: claim the business proportion.

A common approach: separate business mobile line, fully claimable; share of home broadband (e.g. 50% if you use it equally for both).

Professional training

Allowable if it’s:

• Updating existing skills for your current business.
• Maintaining professional qualifications.
• Examples: CPD courses, software training, professional development relevant to your business.

NOT allowable:

• Training to acquire a new trade (start-up costs).
• General education unrelated to the business.

A web developer attending a React training: claimable. A web developer attending an aromatherapy course: not claimable (different trade).

Professional subscriptions and memberships

• Trade or professional body fees (RIBA, ICAEW, GMC, etc.).
• Industry publications and journals.
• Software-as-a-service subscriptions used for business.

Insurance

• Professional indemnity insurance.
• Public liability insurance.
• Business interruption insurance.
• Equipment insurance.

Personal life insurance is not allowable.

Bank charges and interest

• Business bank account fees.
• Interest on business loans.
• Credit card interest on business-only spending.

Marketing and advertising

• Website hosting and domain costs.
• Online advertising (Google Ads, Meta Ads, LinkedIn Ads).
• Business cards and printed marketing.
• SEO services.
• Social media management tools.

Subcontractors and outsourcing

If you pay others to do work for you:

• Their fees are allowable.
• You may need to consider IR35 / Construction Industry Scheme if applicable.

Accountancy fees

• Fees paid to accountants or bookkeepers for preparing your accounts.
• Tax advice fees.

What you can’t claim

Common non-allowable expenses:

• Clothing (except specific protective gear or uniforms with logos).
• Personal meals (only allowable if traveling for business).
• Client entertainment (specifically disallowed by HMRC — though business meals while away on business may be OK).
• Fines and penalties.
• Gym memberships (not directly business).
• Personal phone calls.
• Costs incurred before the business started (start-up costs — limited specific exemptions).

Capital expenses vs revenue expenses

Revenue expenses: day-to-day running costs (consumables, services, subscriptions). Fully deductible in the year incurred.

Capital expenses: items that last more than a year (equipment, vehicles, machinery, premises). Either:

• Claim capital allowances over multiple years, OR
• Use Annual Investment Allowance (AIA) for 100% relief in year of purchase (up to £1 million per year).

For most small freelancers, AIA covers all capital purchases in the year — effectively the same as revenue expenses for tax purposes.

Trading allowance vs expenses

Remember the choice at year-end:

• Option A: Claim actual expenses.
• Option B: Claim £1,000 trading allowance.

Choose whichever gives the higher deduction. If your real expenses are below £1,000, the trading allowance is better.

Keeping records

You must keep records for at least 5 years after the 31 January submission deadline of the tax year in question (so records for 2026/27 must be kept until 31 January 2032).

What to keep:

• Sales invoices and receipts.
• Bank statements (business and personal accounts showing business transactions).
• Receipts for expenses.
• Mileage records if claiming vehicle mileage.
• Bank transfers, PayPal, online platform statements.

You don’t need to submit receipts with the tax return, but you must produce them if HMRC asks. They can investigate up to 6 years after submission in normal cases (longer for deliberate errors).

Worked example: full expense claim vs trading allowance

Maria is a freelance graphic designer:

• Gross income 2026/27: £12,000.
• Software subscriptions (Adobe, etc.): £600.
• Computer purchase: £1,200.
• Home office (flat-rate method): £216.
• Marketing and website: £350.
• Insurance: £180.
• Professional subscriptions: £150.
• Mileage to client meetings: £200.

Option A — claim all expenses: £600 + £1,200 + £216 + £350 + £180 + £150 + £200 = £2,896.

Option B — claim trading allowance: £1,000.

Choose Option A: £2,896 of allowable expenses.

Taxable profit: £12,000 − £2,896 = £9,104.

If she’s a higher-rate taxpayer overall, this saves £756 of tax compared to using the trading allowance.

Internal links

• What is the trading allowance and how does it work?
• Do I pay tax on freelance income alongside a full time job?
• How do I file a self assessment tax return for the first time?

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This guide is information, not regulated financial advice. Self-employed expense rules can be detailed and individual circumstances vary — speak to a qualified accountant for complex cases.