Last updated: 14 October 2026
What expenses can you claim for your business?
You can claim costs that are incurred “wholly and exclusively” for your business. They reduce your taxable profit. Common allowable expenses include stock and materials, staff costs, office costs, business travel, vehicle running costs, phone and internet, insurance, marketing, professional fees, bank charges and the business share of working from home. Personal costs, client entertainment and fines can’t be claimed.
Allowable expenses checklist
| Category | Examples |
| Stock and materials | Goods for resale, raw materials, direct costs |
| Staff | Salaries, employer NIC, pensions, subcontractors, staff training |
| Premises | Rent, business rates, utilities, repairs, cleaning |
| Office | Stationery, software, phone, internet, postage |
| Travel | Train, air and taxi fares, hotels, meals while travelling, parking |
| Vehicles | Fuel, insurance, repairs, or 45p a mile simplified |
| Marketing | Advertising, website, design, trade shows |
| Professional | Accountant, solicitor, professional subscriptions |
| Finance | Bank charges, loan interest (limits for sole traders using the cash basis) |
| Insurance | Public liability, professional indemnity, contents |
Expenses you can’t claim
- Client entertainment and most gifts
- Personal clothing, even if worn for work (uniforms and PPE are allowable)
- Commuting to a permanent workplace
- Fines and penalties
- Personal shares of mixed costs
- Capital purchases (claim capital allowances instead, unless you use the cash basis)
Sole traders vs limited companies
Sole traders deduct expenses on their Self Assessment return. Limited companies deduct them from profits before corporation tax. Directors can be repaid personal spending on company costs tax-free. Some benefits, such as a company car, are deductible for the company but taxable for the director.
Simplified expenses
Sole traders can use flat rates for:
- vehicles: 45p a mile for the first 10,000 miles, 25p after
- working from home: £10 to £26 a month, based on hours
- living at business premises, such as a B&B
Example
A self-employed photographer with £50,000 of income claims £4,200 for equipment, £3,600 for mileage, £1,200 for software and phone, £800 for insurance and £600 for accountancy. Her profit falls to £39,600, saving about £2,600 in income tax and NIC.
Keep records
Keep receipts for 5 years after the 31 January filing deadline (sole traders) or 6 years (companies). Apps such as Dext and Xero help.
Expense claims HMRC often challenges
HMRC checks claims for mixed-use items such as cars, phones and home costs, and looks for personal spending recorded as business expenses. Keep a mileage log, apportion bills fairly and write a short note on any unusual expense. Claims for clothing and meals are queried most often.
A further example
A consultant pays £600 a year for her phone, used 60% for business. She claims £360 as an expense. If you’re unsure whether a cost is allowable, note why you bought it at the time. Your accountant can review borderline costs before the return is filed.
Frequently asked questions
Can I claim my phone bill?
Yes, the business-use share, or the full cost of a business-only phone.
Can I claim lunch at work?
Not normally, unless you are travelling for business away from your usual workplace.
Can I claim gym membership?
No, it is a personal cost.
What about training?
Yes, if it relates to your existing business. See HGV and other training costs.
Related: repairs as allowable expenses and what travel expenses can I claim.
Talk to Accotax
Want this handled for you? Our team at Accotax can help with business expenses. See our small business accountants service, or contact us for a free, no-obligation quote.
This page is general guidance based on HMRC rules for the 2026/27 tax year, checked against gov.uk on 14 October 2026. It is not personal advice, so speak to an accountant about your own situation.
