What expenses can I claim as a sole trader?
Allowable expenses reduce your tax bill by lowering your taxable profit. Here's a plain-English guide to what sole traders can and can't claim in 2025/26, with examples.
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6/24/20263 min read
What expenses can I claim as a sole trader?
One of the advantages of being self-employed is the ability to deduct legitimate business costs from your income before calculating your tax bill. Every pound you claim as an allowable expense reduces your taxable profit - and therefore reduces the income tax and National Insurance you owe.
The basic rule is simple: a cost is allowable if it's incurred wholly and exclusively for your business. Where something is used for both business and personal purposes - your mobile phone, for example - you can usually claim a fair proportion of the cost.
Here's a guide to the main categories, based on 2025/26 HMRC guidance.
Office costs
If you work from a rented office or co-working space, the full cost is allowable. Everyday office supplies - stationery, printer ink, postage - are also claimable in full.
Software subscriptions used for your business (accounting software, project management tools, design apps) are allowable. If a subscription covers both personal and business use, claim the business proportion only.
Working from home
If you work from home, you have two options for claiming the additional household costs:
• Flat rate (simplified expenses) - claim £10 per month if you work from home 25-50 hours per month, £18 per month for 51-100 hours, or £26 per month for 101 hours or more. No receipts required.
• Actual costs - calculate the business proportion of your household bills (heating, electricity, broadband, council tax, mortgage interest or rent). This requires more record-keeping but can give a higher claim if your bills are significant.
You can claim your business phone and broadband costs separately on top of the flat rate, as those aren't included in the simplified expenses calculation.
Travel and mileage
If you use your personal vehicle for business journeys, the easiest method is HMRC's approved mileage rate - 45p per mile for the first 10,000 business miles in the 2025/26 tax year, then 25p per mile after that. This covers all vehicle costs including fuel, insurance, road tax and servicing, so you can't claim those separately if you use the mileage method.
Keep a mileage log with the date, destination, business purpose and miles for each journey. Your normal commute to a regular workplace doesn't count - but travel to clients, suppliers or other business locations does.
Public transport fares, parking costs, and accommodation for overnight business trips are also allowable. Meals during overnight business travel can be claimed, but taking a client out for dinner is not - HMRC treats client entertainment as non-allowable.
Equipment and tools
Items you buy specifically for your business - tools, equipment, a laptop used for work - are generally allowable. Smaller items can usually be claimed in full as an expense in the year of purchase. Larger or longer-lasting items may need to go through capital allowances instead, though the Annual Investment Allowance means most sole traders can still claim the full cost upfront.
If you use a piece of equipment for both business and personal purposes, claim the business proportion only.
Professional fees and insurance
Accountant fees, legal advice relating to your business, and business insurance are all allowable expenses. Professional memberships and subscriptions to trade or industry bodies are also claimable, as are subscriptions to trade journals or professional publications relevant to your work.
Marketing and website costs
Advertising costs, website hosting, domain registration, and any paid marketing are allowable in full. If you pay for design work or copywriting for your business, those costs are claimable too.
Training and development
Training costs are allowable if the training is directly related to your existing business - updating your skills or knowledge in your current field. A course that qualifies you for a completely different trade or profession isn't allowable.
What you can't claim
A few things that commonly come up but aren't allowable:
• Everyday clothing - even if you only wear it for work. Protective clothing and branded uniforms are an exception.
• Client entertainment - taking clients out for meals, drinks or events isn't allowable, regardless of the business purpose.
• Fines and penalties - parking fines and HMRC penalties can't be claimed.
• Personal expenses - any cost that's primarily personal, even if you occasionally use it for work.
Keeping records
You don't need to send receipts to HMRC when you file your return, but you do need to keep them in case HMRC ever asks. The rule is to keep records for at least 5 years after the 31 January filing deadline for the relevant tax year.
A receipt capture app makes this much easier - you photograph receipts as you go rather than trying to find them all in January. See our Receipt Capture directory for options, and our Expense and Mileage Tracking directory for apps that make mileage logging straightforward.
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