Freelancer Tax-Deductible Expenses 2026/27: Complete UK Guide
The new tax year starts 6 April 2026. This is the definitive guide to what UK freelancers and sole traders can claim as allowable expenses in 2026/27 — covering every major category, with HMRC rules and the grey areas that trip people up.
The Core HMRC Rule
HMRC allows you to deduct expenses that are "wholly and exclusively" for business purposes from your self-employed income. This reduces your taxable profit, which reduces your tax and National Insurance bill.
The key word is exclusively. If something has a personal element — a mobile phone you also use personally, a meal where you talked about business — you can only claim the business proportion, and only if you can clearly separate it.
There is no separate list of "allowable expenses for 2026/27" — the rules have not changed with the new tax year. What has changed is the context: under Making Tax Digital from April 2026, all expense records must be kept digitally from the moment the transaction happens.
💡 Use the Tax Saving Estimator to see how much your current claimed expenses are saving you — and spot categories you might be missing.
Office and Home Working
Dedicated business premises
If you rent an office or studio purely for business use, the full cost is allowable — rent, rates, insurance, utilities, and any repairs or maintenance.
Working from home
If you work from home, you can claim a proportion of your home running costs. You have two options:
| Method | How it works | Best for |
|---|---|---|
| Flat rate (simplified expenses) | £10/month (25–50 hours), £18/month (51–100 hours), £26/month (100+ hours) | Anyone who wants simplicity |
| Actual cost method | Calculate the business proportion of rent/mortgage interest, utilities, council tax, broadband | Higher earners with larger homes and significant work-from-home costs |
The flat rate is simpler and avoids CGT complications. The actual cost method can yield a larger deduction if you have a large home and work from it extensively.
Note: If you use the actual cost method and own your home, claiming a portion of mortgage interest (not capital) is allowed, but claiming any of the capital repayment or the room itself can create a CGT liability when you sell. Take advice before doing this.
Equipment and Technology
Items bought wholly for business use can be claimed through Annual Investment Allowance (AIA) — meaning you deduct the full cost in the year of purchase rather than depreciating it over time.
AIA is currently unlimited (up to £1 million per year), so for most freelancers every qualifying purchase can be deducted in full in the year it is bought.
Claimable equipment
- Laptop, desktop, or tablet (business use only)
- Monitor, keyboard, mouse
- Printer, scanner
- Camera (for business photography/video)
- External hard drives, USB hubs, cables
- Office chair, desk (if in a dedicated home office)
- Business phone (100% if dedicated, proportional if shared)
Dual-use devices
If your laptop is used for business and personal purposes, you can only claim the business portion. HMRC does not prescribe a formula — you must make a reasonable estimate and be consistent. Many freelancers claim 70–80% for a laptop used primarily for work.
Travel and Vehicles
Business travel by public transport
Train tickets, bus fares, and taxi costs for genuine business journeys (meeting clients, visiting sites, attending professional events) are fully claimable. Your regular commute is not claimable — sole traders do not have a commute in the HMRC sense, but the equivalent (regular travel to a fixed place of work) is not deductible.
Car and van use
Two options:
| Method | Rate | Notes |
|---|---|---|
| Flat rate (mileage) | 45p/mile (first 10,000 miles), 25p/mile after | Covers fuel, wear and tear. Cannot also claim fuel separately. Simpler for most. |
| Actual costs | Business proportion of insurance, fuel, servicing, MOT, road tax | More complex. Better for high-mileage sole traders with older vehicles. |
You cannot switch methods once you have chosen one for a particular vehicle.
Accommodation and subsistence
Hotel costs for overnight business trips are claimable. Meals during business travel are claimable if you are away from your base for more than a working day. Entertaining clients is not claimable — client entertainment is specifically disallowed by HMRC.
Marketing and Advertising
Fully claimable:
- Website hosting and domain registration
- Website design and development costs
- Google Ads, Facebook Ads, LinkedIn Ads spend
- Social media scheduling tools
- Business cards, printed brochures
- SEO tools (Ahrefs, Semrush subscriptions)
- Email marketing software (Mailchimp, ConvertKit, etc.)
- Stock photography for business use
Not claimable: Client entertaining, team lunches (even "working lunches" are often disallowed unless they are a genuine business meeting with an external party).
Professional Fees and Training
Professional fees
- Accountant and bookkeeper fees (business only)
- Solicitor fees for business contracts
- Professional memberships relevant to your trade
- Patent and trademark registration fees
Training
Training that updates or maintains existing skills is allowable. Training that allows you to enter a new profession is not.
Examples:
- ✅ A developer taking an advanced React course — updating existing skills
- ✅ A copywriter attending a copywriting masterclass — updating existing skills
- ❌ A developer taking a project management qualification to change careers — entering a new profession
- ✅ A freelancer taking a business finance course to help manage their own books — arguably maintaining skills in running their business
The line is not always clear. HMRC's rule of thumb: if the training makes you capable of doing a different type of work, it is likely disallowed.
Insurance
Fully claimable business insurance:
- Professional indemnity insurance — essential for most freelancers
- Public liability insurance
- Employers' liability insurance (if you have employees or regular subcontractors)
- Business contents insurance
- Cyber insurance
Not claimable: Life insurance, income protection, health insurance (for yourself) — these are personal insurance products. However, if you employ staff and provide group health insurance as a benefit, the cost may be claimable as a staff cost.
Staff and Subcontractors
If you hire employees or pay subcontractors, the wages and subcontractor fees are claimable business expenses.
For subcontractors: you must keep records of who you paid, when, and how much. Under CIS (Construction Industry Scheme) rules, additional obligations apply if you are in the construction sector — see our CIS guide.
Your own "salary" drawn from your sole trader profits is not an expense — it is just your profit. You pay tax on profit, not on what you draw out.
Finance and Banking
- Business bank account fees — claimable
- Interest on business loans — claimable (not capital repayments)
- Merchant fees (PayPal, Stripe, Square transaction fees) — claimable
- Hire purchase interest for business equipment — claimable
- Invoice factoring fees — claimable
- Credit card interest on business expenditure — claimable (the interest, not the purchases themselves which may be claimed separately)
Software and Subscriptions
Subscriptions to software used wholly for business are fully claimable:
- Accounting software (FreeAgent, QuickBooks, Xero)
- MTD-compatible software subscriptions
- Project management tools (Notion, Asana, Monday.com)
- Design tools (Adobe Creative Cloud, Figma, Canva Pro)
- Development tools (GitHub Copilot, JetBrains, Vercel)
- Communication tools (Slack premium, Zoom)
- Cloud storage for business (Dropbox Business, Google Workspace)
- AI tools used for business (ChatGPT Plus if used for work)
Again: dual-use subscriptions (personal and business) can only be claimed for the business portion.
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Get the Tax Tracker Spreadsheet — £7 →Grey Areas: Common Mistakes
Home broadband
If you work from home and your broadband is used for both business and personal purposes, you can claim the business proportion. Most sole traders claim 50–70%. If your broadband is truly essential for your business (e.g. you are a developer working remotely all day), a higher proportion is defensible.
Clothing
Almost never claimable for sole traders. HMRC requires clothing to be a uniform (branded with the business name) or protective clothing required by the nature of the work. A suit worn to client meetings is not claimable — it can be worn outside work. Stage costumes worn by performers are claimable. Smart casual worn by consultants is not.
Food and drink
Generally not claimable. HMRC's position: food is a personal need whether you are working or not. Exception: meals when travelling away from your normal working base for a genuine business reason, and for a period longer than a normal working day.
Gifts to clients
Limited to £50 per client per year, and must carry a business logo. Cash gifts and food/drink gifts are not claimable. This is an unusual and often overlooked allowance.
Pension contributions
Personal pension contributions are not an expense on your self-employment accounts — they come off your income at a different point (you claim tax relief through your self-assessment or through the pension provider). Do not include them in your business expenses.
MTD and Digital Record-Keeping from April 2026
If your self-employment income exceeds £50,000, from 6 April 2026 you must record all expenses digitally as they occur — not at year end.
This means:
- Every business purchase must be recorded in your MTD software or digital spreadsheet at the time
- The record must include: date, amount, and category
- Paper receipt books and end-of-year entries are no longer compliant for affected taxpayers
In practice, most MTD software (FreeAgent, QuickBooks, Xero) makes this automatic if you connect your business bank account — transactions come in and just need categorising. For cash purchases, you need to enter them manually at the point of purchase.
See our guide to MTD digital records for the full breakdown of what HMRC expects.
FAQ
What is the HMRC rule for allowable expenses?
HMRC allows expenses that are "wholly and exclusively" for business purposes. If something has a dual purpose (personal and business), you can only claim the business portion — and only if you can clearly separate the two.
Can I claim expenses without receipts?
HMRC recommends keeping receipts for all claims. For small cash expenses (under £10), a note of the date, amount, and purpose is generally acceptable. Bank statements can support larger claims. Under MTD, all records must be kept digitally from April 2026.
Can I claim for a mobile phone as a freelancer?
Yes, for the business portion. If your phone is used 50% for business, you can claim 50% of the cost. If you have a dedicated business phone used exclusively for work, you can claim 100%.
Can I claim for the cost of an accountant?
Yes. Accountancy, bookkeeping, and tax preparation fees paid wholly for your business are allowable expenses. This includes MTD-compatible software subscriptions.
Do I need to register for VAT to claim expenses?
No. Claiming expenses reduces your taxable profit regardless of whether you are VAT-registered. VAT registration has its own separate rules based on turnover (currently £90,000 threshold).