What can a sole trader claim as a business expense?
As a UK sole trader, you can deduct allowable business expenses when you work out your taxable profit. If a cost is partly personal and partly business, and the parts can be separated, you can only claim the business share. Some costs have special rules or exclusions. An expense reduces your profit. It doesn’t mean HMRC refunds the whole purchase price. HMRC: allowable expenses.
“Can I put it through the business?” is a fair question. The useful follow-up is: what was it for, and how much of it was genuinely for work?
Start with the business purpose
Costs must meet the relevant rules for business expenses. If a cost has business and personal parts that can be separated, claim only the business share. Common categories include:
software
stock
business insurance
qualifying professional fees
advertising
business travel
Some costs have specific exclusions or special treatment. HMRC: allowable expenses.
Keep evidence of what you bought, why it was for the business and how you worked out any split. Most sole traders must keep records for at least five years after the relevant 31 January filing deadline. In some circumstances, you’ll need to keep them for longer. HMRC: keeping records.
The trading allowance is an alternative
If you qualify, you can normally deduct the £1,000 trading allowance instead of actual expenses. You can’t claim both against the same trading income. The allowance can’t create a loss. It also isn’t available for partnership trading income or certain connected-party income (income from people or businesses you’re connected with). HMRC: trading allowance.
Compare the options you qualify for, rather than automatically choosing the one with less paperwork.
What can I claim for working from home?
You can work out a reasonable business share of qualifying household costs. Or, if you meet the conditions, you can use simplified expenses: a flat monthly amount based on the hours of business work you do at home.
Business work at home per month | Simplified monthly amount |
|---|---|
25–50 hours | £10 |
51–100 hours | £18 |
101 hours or more | £26 |
The simplified amount doesn’t include phone and internet costs. You can work out their business share separately. You still need records to back up your claim, including your hours. HMRC: simplified home-working expenses.
If you use actual costs, qualifying items can include a business share of:
rent or mortgage interest
heating
electricity
other household costs
Mortgage capital repayments (the part that pays off the loan itself) don’t qualify. Use a reasonable method that reflects actual use, rather than assuming every bill gets the same percentage. HMRC: home-working costs.
Using part of your home only for business can affect private residence relief when you sell. Check where you stand before you make assumptions about a dedicated workspace. HMRC: business use of your home.
Mileage and travel
For qualifying vehicles using simplified expenses in 2026/27, cars and goods vehicles use 55p per business mile for the first 10,000 miles, then 25p. Motorcycles use 24p. The first-band rate for cars and goods vehicles was 45p before 6 April 2026.
The mileage rate replaces the relevant costs of buying and running the vehicle, so don’t also claim fuel and servicing. There are restrictions if you’ve already claimed for the vehicle in another way. And you must keep using the mileage method for that vehicle while you use it in the business. Keep a log of your business miles. HMRC: simplified vehicle expenses.
Business travel can qualify. Private journeys and ordinary travel between home and work don’t. Meals and accommodation have conditions too. Your everyday lunch isn’t automatically a business expense. HMRC: travel expenses.
Equipment and training: two easy mistakes to avoid
Equipment does not always mean capital allowances. Under the cash basis, qualifying equipment such as computers is generally claimed as an expense. Under traditional accounting, capital allowances (a separate way of getting tax relief on equipment) may apply instead. Cars and some other assets have their own rules. HMRC: equipment.
Training does not have to repeat an existing skill. Qualifying training can develop new skills that support your existing business. That includes admin skills, or adapting to changes in your industry. Training to start a new business or move into an unrelated field can’t be claimed. HMRC: training costs.
Costs to keep out of the expense total
These generally aren’t allowable:
client entertainment
everyday clothing
fines
your own drawings (money you take out of the business for yourself)
Your personal pension contributions have their own tax relief rules. They don’t reduce your sole-trader trading profit as a business expense. HMRC: expense rules and exclusions.
When something is unclear, write down the facts and check the relevant category. That’s more reliable than deciding that anything useful to your working life must be deductible.
