Allowable Expenses for Self-Employed UK 2026: Complete List of What You Can Claim
If you're self-employed in the UK, every legitimate expense you claim reduces your taxable profit — and therefore your tax bill. Yet thousands of freelancers and sole traders either overclaim (risking HMRC penalties) or underclaim (paying more tax than they need to).
This guide covers every allowable expense category for the 2025/26 tax year, with practical examples and the HMRC rules behind each one.
How Allowable Expenses Work
When you're self-employed, you pay tax on your profit — not your total income. Profit = income minus allowable expenses.
Example: You earn £40,000 and have £8,000 in allowable expenses. You pay tax on £32,000, not £40,000. At the basic rate, that saves you roughly £1,600 in income tax alone, plus National Insurance savings on top.
The golden rule: an expense must be wholly and exclusively for business purposes. If something is partly personal, you can usually only claim the business portion.
Office and Workspace Costs
Working from Home
If you work from home (as most freelancers do), you can claim a proportion of your household costs:
Simplified method — claim a flat rate based on hours worked from home per month:
- 25–50 hours/month: £10/month
- 51–100 hours/month: £18/month
- 101+ hours/month: £26/month
Actual costs method — calculate the business proportion of your rent/mortgage interest, council tax, electricity, gas, water, broadband, and insurance. If your home office is one room out of five, you can typically claim 20% of these costs.
Which is better? For most freelancers working full-time from home, the actual costs method claims significantly more. But you need records.
Rented Office or Coworking
If you rent a dedicated workspace, coworking membership, or hot desk — 100% claimable as long as it's used for business.
Office Equipment and Furniture
- Desk, chair, monitor, keyboard, mouse
- Printer, scanner, shredder
- Filing cabinets, shelving
- Items under £1,000 typically qualify for immediate deduction. Larger items may need to be claimed via capital allowances.
Technology and Software
- Computer, laptop, tablet (business use proportion)
- Mobile phone (business use proportion — if also used personally, claim the business %)
- Software subscriptions: accounting software, project management, design tools, cloud storage
- Domain names and web hosting
- Website design and maintenance costs
- Email marketing tools
Tip: If you buy a laptop for £900 and use it 80% for business, claim £720.
Travel
Business Travel (Not Commuting)
- Train, bus, and taxi fares to meet clients or attend business events
- Mileage if using your own car (simplified expenses: 45p/mile for first 10,000 miles, 25p/mile after)
- Parking and congestion charges on business trips
- Hotel stays for business trips
- Meals during overnight business trips (reasonable amounts)
Not claimable: Your regular commute to a permanent workplace. If you work from home and travel to a client site, that IS claimable.
Vehicle Costs
Option 1 — Simplified mileage: 45p/mile (first 10,000), 25p/mile (thereafter). Keep a mileage log.
Option 2 — Actual costs: Fuel, insurance, road tax, MOT, servicing, breakdown cover — claim the business proportion. More paperwork but sometimes more valuable for high-mileage drivers.
You must pick one method and stick with it for the life of the vehicle.
Marketing and Advertising
- Google Ads, Facebook/Instagram ads, LinkedIn ads
- Business cards, flyers, brochures
- Website SEO costs
- Social media management tools
- PR and copywriting services
- Trade show/exhibition fees and materials
- Portfolio hosting costs
Professional Services
- Accountant and tax adviser fees
- Solicitor fees (for business contracts, debt recovery, etc.)
- Business insurance (professional indemnity, public liability, etc.)
- Membership of professional bodies (e.g., IPSE, ACCA, CIMA, relevant trade associations)
Financial Costs
- Bank charges on your business account
- Interest on business loans or overdrafts
- Credit card interest on business purchases
- Payment processing fees (Stripe, PayPal, Square)
- Bookkeeping software (Xero, FreeAgent, QuickBooks)
- Debt collection costs
Training and Development
- Courses that update or maintain existing skills for your current trade
- Books, journals, and publications relevant to your business
- Conference and event tickets
- Professional development webinars
Not claimable: Training to acquire entirely new skills unrelated to your existing business. If you're a web designer, a photography course isn't allowable — unless you're expanding your web design services to include photography.
Stock, Materials, and Raw Goods
- Raw materials for products you make or sell
- Stock for resale
- Packaging materials
- Postage and delivery costs
Clothing
Very limited. You can claim:
- Protective clothing required for work (high-vis, steel-toe boots, hard hats)
- Uniforms with your business logo that aren't suitable for everyday wear
- Costumes for performers
Not claimable: Smart clothes for meetings, even if you only wear them for work. HMRC's test is whether the clothing is "wholly and exclusively" for business — a suit fails this test because you could wear it elsewhere.
Staff Costs
If you hire anyone:
- Salaries and wages
- Employer's NI contributions
- Pension contributions
- Subcontractor costs
- Recruitment fees
- Staff training
What You CANNOT Claim
- Personal expenses (even if incurred during work hours)
- Fines and penalties (parking tickets, HMRC late filing penalties)
- Client entertaining (meals with clients are NOT allowable — this catches people out)
- Your own salary or drawings (sole traders take drawings, not salary)
- Clothing that could be worn outside work
- Gym membership (unless you're a fitness professional)
Record-Keeping Requirements
With Making Tax Digital rolling out from April 2026, keeping proper records is no longer optional:
- Keep receipts for everything (digital copies are fine)
- Record expenses as they happen — don't let them pile up
- Separate business and personal bank accounts
- Keep records for at least 5 years after the 31 January submission deadline
Our MTD compliance tools can help you stay on top of quarterly reporting.
How to Maximise Your Deductions
- Track everything from day one. The expenses you forget to claim are pure lost money.
- Use the actual costs method for home office if you work from home full-time — it almost always beats the flat rate.
- Keep a mileage log if you drive for business. Apps like MileIQ automate this.
- Claim capital allowances on big purchases (equipment over £1,000).
- Don't forget the small things — bank charges, phone bill proportion, cloud storage subscriptions. They add up.
Getting Help
If you're unsure about a specific expense, check HMRC's guidance on allowable expenses or speak to an accountant. The cost of an accountant is itself an allowable expense — and a good one typically saves you far more than their fee.
Need help with your invoicing and getting paid? Our Getting-Paid Toolkit includes invoice templates, payment reminder sequences, and late payment letter templates — everything a UK freelancer needs to chase payments professionally.
Landolio helps UK freelancers and sole traders get paid faster and stay tax-compliant. Browse our tools →