Allowable Expenses: What Can UK Sole Traders Claim?
Introduction
As a UK sole trader, understanding what you can and cannot claim as an allowable business expense can make a big difference to your tax bill. HMRC’s rules can seem confusing at first, but once you understand the principles, claiming the right expenses becomes straightforward — and can save you hundreds of pounds every year.
This guide explains:
- what allowable expenses are
- the types of costs sole traders can claim
- common mistakes to avoid
- how to handle mixed personal/business costs
- what records HMRC expects you to keep
For even more detail, see our full Guide to Allowable Expenses.
What Counts as an Allowable Expense?
Allowable expenses are business costs that HMRC lets you deduct from your income before calculating tax. The basic rule is simple:
An expense must be wholly and exclusively for business use.
This means:
- If a cost is purely business-related → you can claim it in full
- If it has both business and personal use → you can claim the business proportion
- If it’s mainly personal → you cannot claim it
HMRC does not allow personal or lifestyle expenses, even if they benefit your business.
Common Allowable Expenses for UK Sole Traders
Travel and transport
You can claim travel costs that are directly related to your business, including:
- mileage (using HMRC’s approved rates)
- fuel for business journeys
- public transport for work trips
- parking fees
- hotel stays for overnight business travel
You cannot claim:
- commuting between home and your usual place of work
- driving lessons
- speeding or parking fines
Tools, equipment and supplies
You can claim the cost of:
- tools and equipment needed to do your job
- replacement tools
- protective clothing
- specialist software
- stationery and office supplies
General clothing is not allowable unless it is protective or branded for work use.
Home office costs
If you work from home, you can claim part of your household costs. HMRC offers two methods:
1. Simplified expenses. A flat rate based on hours worked from home each month.
2. Actual apportionment. Claim a percentage of:
- rent or mortgage interest
- electricity and heating
- council tax
- broadband and phone usage
Only the business portion is allowable; the split must be reasonable.
Phone and internet use
If you use your personal phone or broadband for work:
- you can claim the percentage that relates to business use
- you cannot claim the personal portion
Example:
If 40% of your phone use is for work, you can claim 40% of your monthly bill.
Marketing and advertising
Fully allowable expenses include:
- website hosting
- advertising (online or offline)
- promotional materials
- business cards
- design and branding costs
Professional services and subscriptions
You can claim:
- membership fees for professional bodies
- accountant fees
- business-related legal advice
- software subscriptions used for your work
Personal services or non-work-related memberships are not allowable.
Expenses You Cannot Claim
Some costs are explicitly not allowable, such as:
Everyday clothing
Even if you wear certain clothes “for work”, they are not allowable unless they are:
- protective
- safety-related
- specialist uniforms
Client entertainment
You cannot claim:
- meals out with clients
- entertainment
- hospitality
- gifts (unless low-value promotional items)
Personal expenses
HMRC does not allow:
- personal travel
- holidays
- groceries
- gym memberships
- learning a completely new trade
Part Business / Part Personal Expenses
Many expenses fall into a grey area.
HMRC allows you to claim the business portion as long as the split is reasonable.
Examples include:
- phone bills
- internet
- car use
- home utilities
Important:
- You must be able to justify your calculation
- You don’t need perfect precision — just a fair estimate
- Keep notes explaining your % split
Record Keeping for Allowable Expenses
HMRC requires you to keep evidence of all the expenses you claim.
This includes:
- receipts
- invoices
- bank statements
- mileage logs
- proof of online purchases
- notes explaining any apportionment
You must keep records for at least five years after the submission deadline for that tax year.
For more detail, see our Record Keeping Guide.
Common Mistakes Sole Traders Make
Claiming expenses without evidence
HMRC can request proof at any time.
Forgetting small expenses
Low-value but frequent costs (e.g., parking, fuel, stationery) add up.
Not claiming home office usage
Many sole traders overlook this entirely.
Mixing personal and business costs
Always calculate the business proportion honestly and consistently.
How QTax Helps You Claim the Right Expenses
QTax is designed specifically for sole traders and helps you handle expenses confidently during your Self Assessment.
✔ Simple explanations
QTax provides clear guidance on common allowable expenses.
✔ Smart prompts
We flag potential issues or missing information before you submit.
✔ Built for sole traders
You won’t be overwhelmed with irrelevant corporate accounting features.
See the full experience in our Product Tour
or learn more on our Pricing page.
FAQs
Do I need to upload receipts to HMRC?
No — but you must keep them in case HMRC asks for evidence later.
Can I claim clothing?
Only protective clothing or branded uniforms, not everyday wear.
What if part of an expense is personal?
Claim the business portion only; keep a note of how you calculated it.
Conclusion
Allowable expenses are one of the clearest ways to reduce your tax bill as a sole trader — as long as they follow HMRC’s rules. Understanding these rules helps you claim confidently and avoid mistakes.
QTax guides you through allowable expenses step by step so you can file your Self Assessment accurately and stress-free.
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