The rule behind every answer: a cost is allowable if you incur it wholly and exclusively for the business. If something is used for both business and private purposes, you claim only the business share. Things you buy to keep are relieved through capital allowances on traditional accounting, or as ordinary expenses on the cash basis (cars excepted). Personal costs, fines and entertaining clients are never allowable.
An allowable expense reduces your profit, so it saves tax at your marginal rate: 26p in the pound for a basic-rate sole trader, 42p at the higher rate. See how the figures work out for you in the sole trader tax calculator.
A to Z: 88 expenses
Each page gives the answer for sole traders and, where it matters, landlords, with the HMRC source.
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The 23 expense categories on your return
The 15 self-employment categories (SA103F boxes 17 to 30) and the 8 UK property ones, which Making Tax Digital quarterly updates use too.
Self-employment categories
- Phone, stationery and other office costs
- Advertising costs
- Irrecoverable debts written off
- Business entertainment
- Construction industry payments to subcontractors
- Cost of goods sold
- Depreciation and loss or profit on sale of assets
- Bank, credit card and other financial charges
- Interest on bank and other loans
- Other business expenses
- Rent, rates, power and insurance costs
- Accountancy, legal and other professional fees
- Repairs and maintenance of property and equipment
- Wages, salaries and other staff costs
- Car, van and travel expenses
UK property categories
- Costs of services provided, including wages (property)
- Non-residential property finance costs
- Other allowable property expenses
- Rent, rates, insurance and ground rents (property)
- Legal, management and other professional fees (property)
- Property repairs and maintenance
- Residential property finance costs
- Travel costs (property)
Frequently asked questions
What expenses can I claim if I am self-employed?
Costs incurred wholly and exclusively for the business: stock and materials, business travel or mileage, the business share of phone and home costs, staff, premises, insurance, advertising, professional fees, bank charges and training that keeps your skills up to date. Personal costs, fines and client entertaining are not allowable.
How much tax does an allowable expense save?
It reduces your profit, so it saves tax at your marginal rate: for a sole trader in England, Wales or Northern Ireland, 26p in the pound at the basic rate (20% Income Tax and 6% Class 4) and 42p at the higher rate. Landlords pay no Class 4, so they save 20p or 40p.
Can I claim expenses and the £1,000 trading allowance?
No. You either deduct your actual allowable expenses or the £1,000 trading allowance, whichever gives the lower profit. Landlords choose between expenses and the £1,000 property allowance in the same way.
Record a cost once. TapTax files it in the right box.
Snap a receipt and TapTax reads it, puts it in the HMRC category it belongs to and keeps it for your quarterly updates.
Get started free- Sole trader tax
Income tax, Class 4 National Insurance and take-home pay when you are self-employed.
- Mileage allowance
Your business mileage claim and the tax it saves.
Where the rules come from
Official guidance on GOV.UK and in HMRC’s Business Income Manual.