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The Ultimate List of Self-Employed Expenses You Can Claim

What self-employed expenses can you claim? How do you claim them? And what do you actually get back from HMRC? Everything you ever wanted to know about self-employed expenses is explained in this guide, along with a comprehensive list of allowable expenses.

Friendly Disclaimer: Whilst I am an accountant, I’m not your accountant. The information in this article is legally correct but it is for guidance and information purposes only. Everyone’s situation is different and unique so you’ll need to use your own best judgement when applying the advice that I give to your situation. If you are unsure or have a question be sure to contact a qualified professional because mistakes can result in penalties.

What are ‘Self-Employed Expenses’?

In simple terms, self-employed expenses are things that you pay for as part of your business. For example, if you’ve set up a business email the monthly subscription would be a business expense – in other words, if it weren’t for you working for yourself, you wouldn’t otherwise pay for it.

What Does ‘Claiming Business Expenses’ Mean?

When you’re self-employed the amount of tax and national insurance you’ll pay is based on your business profits. For tax purposes, this means:

Business profits = business income – allowable business expenses

Business profits can be calculated differently in different circumstances, but we are only considering the tax side of things in this guide.

So say your business income was £1,000 and your allowable expenses were £400, you’ll pay tax on your business profit of £600 (£1,000 – £400).

Read=> Self Employed Tax: An Easy Guide for Beginners

What are Allowable Business Expenses?

Self employed expenses fall into two categories:

  1. Allowable expenses
  2. Disallowable expenses

Allowable expenses are costs that HMRC permits you to claim against your tax bill. Generally speaking, most of the things you pay for in your business will be an allowable self employed expense – keep reading for a list of the most common self employed allowable expenses.

There are certain self-employed expenses, that even though you may pay for as a result of working for yourself, you cannot claim against your taxes. These are known as disallowable expenses and include:

Read=> Disallowable Expenses Explained

Self-Employed Allowable Expenses List

As a general rule, any expenses you claim on your tax return must be wholly and necessarily incurred for business purposes only. So if you pay for something essential for your business, like a a website and hosting, then chances are it will count as an allowable expense.

Here’s a self employed allowable expenses list to help you make sure you’re claiming everything you’re entitled to. Don’t forget to save this guide for tax-time!

self-employed allowable expenses list
Self Employed Allowable Expenses List
  • Stock and Raw Materials
  • Wages, Sub-contractors and Freelancers
  • Office Rent
  • Website
  • Travel*
  • Mileage**
  • Car***
  • Home office****
  • Clothing*****
  • Food******
  • Marketing and Advertising
  • Telephone and Internet
  • Insurance
  • Trade or Professional Journals
  • Training and courses
  • Business Subscriptions
  • Professional Fees
  • Payment Processing Fees
  • Bank charges for a business bank account
  • Bank interest for a business bank account (capped at £500 if you use the cash basis)

*Business Travel

In general, you can claim travel away from your base of work to a temporary workplace:

  • Visiting clients for new or existing business;
  • Seeing suppliers;
  • Overnight stays (for business);
  • Training courses;
  • Parking charges are allowable but parking fines are not.

Read=> A Guide to Claiming Business Travel

**Business Mileage

If you choose to use your personal car for business travel, you can claim mileage at the HMRC set rates, known as simplified expenses, to cover the cost of using your car.

The current HMRC’s set rates for most cars are 45p for the first 10,000 business miles and 25p per mile after that. The set rate covers the cost of fuel, servicing, tax, MOT and depreciation of a vehicle. You’ll need to keep a log of your business mileage as evidence for HMRC.

Read=> Self Employed Mileage Allowance & How to Claim It
Download => Business Mileage Log Template

***Car

If you buy a car through your business as a sole trader then, depending on how you bought the car, you can claim for a business portion of the cost of the car, lease or hire purchase payments. This is particularly beneficial if you are dependent on your car to earn money, for example as an Uber driver or work for Amazon Flex.

Read => Can I Buy a Car Through my Business as a Sole Trader?

****Home Office

Many of us self-employed folks choose to work from home. If this applies to you, then you can claim an amount against your taxes to reflect the use of space and increased household bills. 

The easiest way to claim your expense is to use a simplified flat-rate amount depending on the number of hours you work at home. Alternatively, you can claim an actual portion of your household bills.

Read => A Guide to Claiming for Your Home Office

*****Clothing

You can claim the costs of branded uniforms that you have for your business. However, you cannot claim non-branded uniforms unless they are for safety reasons. Dual-use clothing, like business suits, is not an allowable expense.

Read => Claiming for Clothing as a Business Expense

******Food

There are certain circumstances when you are allowed to claim food against your taxes and it can be a complex area. You can generally claim for food and drink when you are away from your base of work seeing clients but you cannot claim for client entertainment (such as lunch with a client).

Read => Can You Claim for Food If You’re Self-Employed?

How to Claim Self Employed Expenses on Your Taxes

You need to claim allowable expenses in the self-employment section of your tax return. If your business turnover is less than £85,000, you’ll have the option to fill in the simplified version of this part of the tax return. Therefore, you only need to enter one figure for your total self-employed expenses for the tax year.

If your business turnover is more than £85,000, you need to enter a breakdown of your expenses in the boxes set out by HMRC.

claim business expenses
How to Claim Self Employed Expenses

Whatever your business turnover, you should keep a note of what you are claiming for and how you worked it out as part of your business records. You can do this by using an accounting software or a bookkeeping spreadsheet.

Is there a ‘Right Amount’ of Self Employed Expenses to Claim?

There is a misconception by some self-employed individuals that they should be claiming a set amount of expenses on their tax returns. There is no ‘right amount’ because no two small businesses are the same, even within the same industry.

One sole trader made decide to use an accountant or another may have to buy more equipment to do their job.

The ‘right amount to claim’ are all the allowable expenses that you have paid for that are wholly and necessarily incurred for your work and that you have receipts or evidence to support.

HMRC will no doubt use some common sense checks when they review your tax return, checking:

– whether the type of expenses you are claiming suit the nature of your business;
– if it is in line with previous tax returns you have submitted;
– receipts (upon request only).

How to Claim for Expenses You Use Both in Business and Personally

There may also be some expenses you pay for that you use both personally and for work, like a laptop, car or pair of glasses. In these cases, where you can make a clear apportionment of your usage, you can only claim a portion as a business expense. So, say you use your laptop for 60% work and 40% personal, then can claim 60% of the total cost on your taxes.

Where you cannot make a clear apportionment, the expense will most likely be disallowable under the rules of duality of purpose. This is a term HMRC uses for expenses that are used both in business and personally. Where an expense is used for both business and personal reasons and it is difficult to distinguish a clear split of usage, like a Spotify subscription that you use while you work, the whole expense is deemed disallowable.

Keeping Receipts

You are legally required to keep copies of receipts and invoices to back up the self-employed expenses that you are claiming for 6 years. It’s proof that you really bought something and that it was for business reasons and you’ve paid the right amount of self-employed tax.

Want to Read More About Self Employment Expenses?

If you’ve enjoyed this post you may like to read more about self-employment expenses. Here are some of my most popular blog posts on this topic…

Any Questions?

I’d love to help if you have any questions about this topic. Feel free to ask over in my group ‘The Self-Employed Club‘.

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