Self-employed expenses: which allowable expenses can I claim?
Find out what tax-deductible expenses you can claim if you are freelance, a sole trader or otherwise self-employed.
Most self-employed people – for example, freelancers, contractors or sole traders – pay income tax on their taxable earnings.
If you're self-employed, you need to calculate and pay your own tax via self-assessment.
It’s important to ensure that you pay the right amount of income tax.
To avoid paying more than you need to, you should claim your allowable business expenses - allowable expenses for limited companies may be slightly different.
In this guide, we tell you how to reduce your tax if you're self-employed and a list of allowable expenses you can claim as deductible from HMRC.
As a sole trader or freelancer, all your income above the personal allowance is taxable.
If your self-employed turnover is above £50,000, you are now legally required to comply with Making Tax Digital (MTD) for Income Tax.
If you earn £1,000 or less per year from self-employment, you don’t need to register for self-assessment or notify HMRC unless asked.
If your ‘office’ is in your home, you can still claim expenses such as heating, electricity, council tax, rent, internet and phone usage.
How can I reduce my income tax by claiming business expenses?
As a sole trader or freelancer, all your income above the personal allowance is taxable.
However, HMRC will often not tax you on money that you need to spend in order to keep your business running.
For this reason, many of the costs directly related to the work you do (such as travel between clients) can be deducted from your gross income when calculating how much tax you need to pay. Such expenses are therefore known as ‘tax deductible’.
For example:
You make £60,000 income for the year, and you have £5,000 of allowable expenses. You also have a personal allowance (£12,570 in the 2026/27 tax year). Deduct both figures to find your taxable income, which is £42,430.
Note that without these expenses, your taxable income would be £47,430 in this example.
What is personal tax planning?
Personal tax planning is about making sure you’re paying the right amount of tax.
Often, people end up overpaying because they’re unaware of their allowances or how to use them effectively.
By planning ahead, you can spot where your money is going and figure out if you’re due for a tax refund or if you owe more. Check your personal tax account on the government’s website to keep track of what you’ve paid and what you still owe.
How Making Tax Digital (MTD) affects your expenses
If your self-employed turnover is above £50,000, you are now legally required to comply with Making Tax Digital (MTD) for Income Tax.
This changes how you record your allowable expenses. Instead of tallying your receipts in a spreadsheet once a year for your annual Self Assessment, you must now use HMRC-compatible software to log your business expenses digitally.
These expenses must then be submitted to HMRC via four quarterly digital updates. While MTD does not change which of your expenses are tax-deductible, it does mean that maintaining organised, real-time digital proof of every business cost is no longer optional.
It is expected that MTD will be rolled out to those with smaller turnovers in the coming years.
Self-employed allowable expenses list
Below is a list of the most common allowable expenses you can claim against your income tax.
1. Office supplies
You can claim for office supplies such as:
Stationery
Printing costs/ink
Postage
Phone and internet bills
Software used for under two years (or on subscription)
2. Office equipment
If you use cash basis accounting, you can also claim expenses for certain business equipment, such as:
Computer hardware
Printers
Software used for over two years
However, if you use traditional accounting, then you will need to claim capital allowances on these instead.
3. Business premises
Expenses you can claim on your business premises include:
Rent for business premises
Utilities
Buildings insurance
Maintenance/repair
Security costs
Note that if you buy your premises, you can’t claim any part of the cost as an expense.
4. Transport
Transport and travel costs that you can claim include any travel necessary for your work (but not travel to and from your workplace).
If a journey is for both personal and business reasons, then ask your accountant to help you quantify the business cost.
If using a vehicle that is not ticketed or metered (e.g. a car you drive yourself), you can calculate the deductible cost using simplified vehicle expenses.
5. Legal and professional costs
If you use professionals such as an accountant, financial adviser, solicitor, surveyor, etc, purely for business reasons, you can claim their fees as expenses. Bank charges also count.
6. Raw materials / stock
You can claim for any raw materials or stock that you use in the course of your work.
7. Marketing
Most of your marketing costs should count as allowable expenses.
8. Professional insurance
Some jobs require you to have special insurance, such as:
Professional indemnity insurance
You can claim these as allowable expenses.
9. Clothing
Any special clothing (e.g. a uniform or costume) needed to do your job is tax-deductible.
10. Trade subscriptions
The cost of membership in trade bodies or professional organisations is an allowable expense, as is the cost of subscribing to professional publications.
What you cannot claim: disallowable expenses
While HMRC is generous with legitimate business costs, there are some items that routinely catch people out as they have a dual personal purpose or are specifically banned by tax law.
Here is a list of the most common things you cannot deduct from your taxes:
Client entertainment: You cannot claim the cost of buying meals, drinks, or event tickets for clients, suppliers, or business prospects.
Everyday clothes: You cannot deduct the cost of standard, everyday clothing—even if you bought it specifically to wear for client meetings, pitches, or a neat professional appearance.
Commuting: You cannot claim travel costs for your regular journey between your home and your permanent office or base of operations.
Fines and penalties: You cannot claim for parking tickets, speeding fines, or penalties issued by HMRC, even if they were incurred while working.
Gym memberships: You cannot deduct fitness memberships or personal health costs, unless your profession requires a highly specialised level of physical fitness, such as being a stunt performer.
Groceries and standard meals: You cannot claim for your everyday lunch, coffee, or snacks while working from your usual home office or regular workplace.
The purchase cost of business premises: You cannot deduct the capital cost of buying a property or building an office extension, though you can deduct the ongoing running costs like utility bills.
Personal use of assets: You cannot claim the full cost of a phone, internet connection, or vehicle if you also use it for personal tasks; you must strictly deduct the personal-use percentage.
What is the tax-free trading allowance?
You may have read that you cannot claim business expenses if you also claim the tax-free trading allowance.
This is an allowance for those who earn only low sums from self-employment, of £1,000 a year or less.
If you earn £1,000 or less per year from self-employment, you don’t need to register for self-assessment or notify HMRC unless asked.
However, if you expect to incur significant expenses, then it may be worth your while to register anyway.
Registering is also worthwhile if you don’t want to miss out on certain benefits (such as maternity allowance).
Can I claim capital allowances when self-employed?
If you use the traditional accounting method, then longer-lasting items you buy for business purposes (such as computers) will count as capital assets rather than expenses.
You can claim capital allowances on these assets.
However, most self-employed people will use cash-basis accounting, generally preferred by small businesses and made the legal default by HMRC in the 2025/26 financial year.
What expenses can I claim if I work from home as self-employed?
If your ‘office’ is in your home (like a garden office), you can still claim expenses such as heating, electricity, council tax, rent, internet and phone usage.
However, you can only claim for the proportion of these utilities that you use for your home office.
There are several different ways to work out the correct proportion.
One method uses the number of rooms in your home; so, for instance, if your home has five rooms, one of which is your office, one-fifth of your heating bill may be tax-deductible.
However, you should ask your accountant about the best way to work this out, to avoid over-claiming or under-claiming.
Another option is to claim simplified expenses, where you calculate allowable expenses using a flat rate based on how many hours you work from home every month.
All other business expenses are claimable in the normal way.
Get expert financial and tax advice
Understanding what expenses you can claim as a self-employed individual is essential for managing your finances and ensuring you only pay the tax you owe.
By keeping track of allowable expenses and making the most of your deductions, you can reduce your taxable income and improve your business's profitability.
Let Unbiased match you with a financial adviser for expert financial advice tailored to your specific needs, ensuring you maximise your tax efficiency and manage your self-employed expenses effectively.
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