Phone, stationery and other office costs
for sole traders

Phone, fax, stationery and other office costs is the category for the everyday running of the business: phone and internet bills, postage, stationery, printing and small office equipment and software. For most sole traders it is a modest total made of many small receipts, which is exactly why it is often under-claimed. Anything shared with personal use, such as a phone or home broadband, goes in at its business share.

What goes in this category

• Phone, mobile and internet bills, for the business share.
• Postage, stationery, printing and printer ink.
• Small office equipment and software used for less than two years, and software subscriptions.
• On the cash basis, computers and office equipment you keep.

What does not

• The private share of phone and internet bills.
• Personal subscriptions, such as music and video streaming.
• On traditional accounting, computers and equipment you keep, which go through capital allowances.
• Stationery and postage for personal use.

Items in this category

Small costs, many receipts

Office costs are typically small and frequent: a book of stamps, ink cartridges, a phone bill each month. Individually they barely matter; across a year they can reach hundreds of pounds. Capturing receipts as you go, with a photo or an app, is the difference between claiming them properly and estimating at the year end. HMRC accepts digital copies of receipts.

Equipment on the cash basis

On the cash basis, now the default for sole traders, equipment you buy to keep, such as a laptop, printer or office chair, is simply an allowable expense when you pay for it. The SA103F notes allow small office equipment in this box. On traditional accounting, the same items go through capital allowances, usually with the Annual Investment Allowance giving full relief in the year.

Phone and broadband at home

Most home-based sole traders share a phone and broadband with the household. Claim the business share on a reasonable basis, such as itemised calls or working hours online. The working-from-home flat rate does not cover phone or internet, so these are claimed in this category on top of it.

Software subscriptions

Software paid for by subscription or regular licence renewal is an allowable office cost, even if you use it for years. That covers accounting and Making Tax Digital software, design and productivity tools, and cloud storage used for the business. One-off software kept for more than two years is capital on traditional accounting.

Landlords’ office costs

Landlords can also deduct direct costs such as phone calls, stationery and advertising for new tenants, but these go on the UK property pages, in other allowable property expenses, not here. Keep the letting business's small costs separate from any trading business's office costs.

Keeping business and personal apart

The simplest way to keep this category clean is a separate business bank card for business purchases and a separate number or line for business calls. When everything runs through one personal account, every small purchase needs sorting into business and personal. Open banking feeds and receipt apps help, but the underlying separation is what makes the records quick to keep and easy to defend.

Office costs in Making Tax Digital updates

Under Making Tax Digital, office costs are one category of each quarterly update, so the running total builds through the year rather than being reconstructed in January. Software that reads your receipts and categorises them saves most of the work. If your turnover is under £90,000, you can send one consolidated expenses figure instead, but you still keep the underlying receipts for at least five years after the 31 January deadline.

VAT on office costs

If you are VAT registered, record office costs net of the VAT you reclaim, because reclaimed VAT never reaches your profit. Postage from Royal Mail is often exempt from VAT, and some software from overseas suppliers carries no UK VAT, so not every receipt has VAT to reclaim. If you are not VAT registered, or you use the Flat Rate Scheme, record the full VAT-inclusive cost as the expense.

Worked example: a freelance copywriter’s office costs

A copywriter working from home claims 50% of a £420 broadband bill (£210), 60% of a £360 phone contract (£216), £540 of software subscriptions and £85 of stationery and postage: £1,051 of office costs. On the cash basis she adds a £1,400 laptop used 90% for work, £1,260, taking the category to £2,311.

Four questions before a cost goes here

1. Was it for the business, and only for it? A cost must be incurred wholly and exclusively for the trade. A cost with a personal purpose that cannot be separated is not allowable at all.
2. Is part of it personal? Where a business part can be identified, such as business miles or business calls, claim that part on a reasonable basis and leave the rest out.
3. Is it a running cost or something you keep? Running costs belong in the expense categories. Things you keep are capital: an expense on the cash basis (except cars), capital allowances on traditional accounting.
4. Is there a specific rule? Some costs are disallowed whatever their purpose, such as fines and client entertaining, and some have their own treatment, such as cars, which always go through capital allowances.

Trading allowance or expenses

Instead of deducting expenses, a sole trader can claim the £1,000 trading allowance against trading income. You cannot claim both, so the allowance only helps when your allowable expenses are under £1,000. If your gross trading income is £1,000 or less, the allowance covers it and you may not need to register. Once your costs pass £1,000, deducting actual expenses gives the lower profit.

This category in Making Tax Digital

Under Making Tax Digital for Income Tax, each quarterly update carries your expenses in the same 15 categories as the full self-employment pages, so this category is one line of every update. Sole traders with qualifying income over £50,000 join from 6 April 2026, falling to £30,000 from April 2027 and £20,000 from April 2028. If your turnover is under £90,000 you can send one consolidated expenses figure instead of the categories, but you still keep the records behind it. The same £90,000 limit decides whether you can use the short self-employment pages (SA103S), which ask only for total allowable expenses.

Cash basis or traditional accounting

The cash basis, the default for sole traders and landlords since 2024/25, counts a cost in the tax year you pay it. Traditional (accruals) accounting counts it when you incur it, whenever you pay, and treats things you buy to keep as capital, relieved through capital allowances. For most costs in this category the only difference is timing; for anything you buy to keep, the basis decides whether it is an expense at all.

The disallowable column

The full self-employment pages have a second column of boxes (32 to 45) for disallowable expenses. If your accounts include something that is not allowable, such as the private share of a phone bill or client entertaining, you put the total cost in the expense box and the disallowable part in the matching box, so the tax calculation adds it back. The short pages (SA103S) simply ask for allowable expenses, so you leave the disallowable part out.

How much an allowable cost saves

Each pound of allowable expense saves a sole trader 26p at the basic rate (20% Income Tax plus 6% Class 4 National Insurance) and 42p at the higher rate, in England, Wales and Northern Ireland. Scottish Income Tax bands differ, and the sole trader tax calculator works out your own figure.

What £1,000 of allowable expense saves a sole trader in 2026/27

• Basic rate (20% + 6%)£260
• Higher rate (40% + 2%)£420
• Additional rate (45% + 2%)£470
• Allowance taper band (60% + 2%)£620

Records to keep

Keep the invoice or receipt for every cost in this category, with a note of the business purpose wherever it is not obvious, and how you worked out the business share of anything also used privately. From 6 April 2026, sole traders and landlords with qualifying income over £50,000 keep digital records and send quarterly updates under Making Tax Digital, falling to £30,000 from April 2027 and £20,000 from April 2028.

Common mistakes

• Claiming the full household phone and broadband bills.
• Claiming personal subscriptions paid from the business account.
• Letting small receipts go unrecorded.

Every other category

The other 14 categories on the self-employment pages, in box order:

• Cost of goods sold, SA103F box 17
• Construction industry payments to subcontractors, SA103F box 18
• Wages, salaries and other staff costs, SA103F box 19
• Car, van and travel expenses, SA103F box 20
• Rent, rates, power and insurance costs, SA103F box 21
• Repairs and maintenance of property and equipment, SA103F box 22
• Advertising costs, SA103F box 24
• Business entertainment, SA103F box 24, disallowed in box 39
• Interest on bank and other loans, SA103F box 25
• Bank, credit card and other financial charges, SA103F box 26
• Irrecoverable debts written off, SA103F box 27
• Accountancy, legal and other professional fees, SA103F box 28
• Depreciation and loss or profit on sale of assets, SA103F box 29, disallowed in box 44
• Other business expenses, SA103F box 30

The A to Z of expenses lists every item and all 23 categories: the 15 self-employment categories and the 8 for UK property.