Self-Employed Expenses: What Can You Claim in 2026/27?

4 min read

Table of Contents

Common allowable expenses
Wholly and exclusively test
Working from home
Vehicles and travel
Food and subsistence
Clothing
Phone and internet
Professional fees and subscriptions
Training and education
Finance costs
Capital expenditure
Disallowed or restricted costs
Trading allowance
Cash basis
Records
Official guidance

Self-employed people can deduct expenses incurred wholly and exclusively for the trade, subject to specific tax rules. Where a cost has both business and private use, claim only a reasonable business proportion. Capital assets and some restricted expenses use separate reliefs.

Common allowable expenses

stock, raw materials and goods for resale;
employee wages, employer National Insurance and pension contributions;
business rent, rates, utilities and insurance;
advertising, website hosting and professional subscriptions;
accountancy, legal and financial costs relating to the trade;
business travel, vehicle costs and accommodation;
office supplies, postage, phone and internet business use;
repairs and maintenance of business equipment;
training that updates existing trade skills;
bad debts recognised under the applicable accounting method.

Wholly and exclusively test

The purpose of the expense must be the trade. A cost with a separate non-business purpose is normally disallowed, though an identifiable business portion can sometimes be separated. Necessity is not the test: an expense can be optional yet allowable if incurred for business.

Working from home

Claim either a reasonable proportion of actual household costs or HMRC’s simplified monthly amount where at least 25 hours are worked at home:

Monthly business hours	Simplified expense
25–50	£10
51–100	£18
101 or more	£26

Telephone and internet business use can be considered separately. See working-from-home expenses.

Vehicles and travel

Choose actual vehicle costs apportioned for business use or simplified mileage where eligible. The mileage rates are 45p for the first 10,000 business miles and 25p thereafter for cars and vans under the self-employed simplified-expense rules. The separate employee mileage rate becomes 55p from 6 April 2026; do not confuse employee reimbursement with a sole trader’s published simplified-expense rate unless HMRC guidance changes.

Ordinary travel between home and a permanent base can be private. Travel to temporary workplaces or customers depends on the business pattern.

Food and subsistence

Ordinary meals are private. Additional subsistence can be allowable where business travel qualifies, a trade is itinerant or an occasional journey is outside the normal pattern. Keep evidence of the travel and purpose.

Clothing

Protective clothing, uniforms and costumes can qualify. Ordinary clothing is not deductible even if bought only for work. A logo does not automatically turn everyday clothing into a uniform.

Phone and internet

Claim the business proportion of calls, data and line costs. A separate business contract is easier to support. Do not claim the full household bill where family or private use is significant.

Professional fees and subscriptions

Accountancy fees for business accounts and tax work are generally allowable, but costs dealing solely with personal tax can be restricted. Legal fees follow the nature of the underlying matter: acquiring a capital asset is normally capital, while routine debt collection can be revenue.

Training and education

Training to update or deepen skills used in the existing trade can qualify. Training that creates a new trade or professional capability is often not an ordinary revenue expense. Consider the business activity before and after the course.

Finance costs

Business loan interest and bank charges can qualify subject to restrictions. Repayment of loan capital is not an expense. Mixed borrowing needs tracing and apportionment.

Capital expenditure

Equipment, machinery and vehicles may qualify for capital allowances rather than a direct expense deduction. The Annual Investment Allowance is generally £1 million, and other allowances include writing-down allowances. Cars have separate rules based on emissions.

Disallowed or restricted costs

private drawings and personal living costs;
fines and penalties for breaking the law;
client entertaining;
ordinary clothing;
income tax and most personal tax payments;
capital asset purchase price claimed as a revenue expense;
the private portion of mixed costs;
expenses already covered by the trading allowance.

Trading allowance

You may deduct the £1,000 trading allowance instead of actual expenses if eligible. You cannot claim both. Actual expenses are often better above £1,000 or where they create a useful loss.

Cash basis

Cash basis is the default for many sole traders from 2024/25. Expenses are generally recognised when paid. Accrual accounting can be elected and uses different timing. The underlying allowability rules still apply.