As a sole trader you pay Income Tax and National Insurance on profit, not turnover. Every allowable expense you record lowers that profit. The test is simple to state: the cost must be wholly and exclusively for your business.
Costs you can usually claim
- Office costs: stationery, printer ink, postage and software subscriptions.
- Phone and internet: the business share of your bills.
- Travel: fuel, parking, train fares and hotels for business trips — but not your regular commute.
- Stock and materials you buy to sell or use in your work.
- Professional fees: accountants, solicitors and trade body memberships.
- Insurance: public liability and professional indemnity.
- Marketing: your website, advertising and business cards.
- Training that updates skills you already use in the business.
Simplified expenses
Instead of working out actual costs, you can use flat rates for some items:
- Vehicles: 45p per business mile for the first 10,000 miles, then 25p.
- Working from home: £10 a month for 25 to 50 hours, £18 for 51 to 100 hours and £26 for more than 100 hours.
Common mistakes
- Claiming everyday clothing. Only uniforms and protective clothing count.
- Forgetting small, regular costs such as bank charges and app subscriptions.
- Mixing personal and business spending in one account, which makes the business share hard to prove.
Keep the evidence
Keep receipts and invoices for every claim. A photo in your bookkeeping app is enough, and it saves hours at year end.
How we help
We review your costs, make sure nothing allowable is missed, and flag anything HMRC is likely to question — before your return is filed.
This article is general guidance based on the rules for the 2026/27 tax year. It isn’t personal advice — talk to us before you act on it.
