Your guide to allowable expenses as part of Self Assessment

As a sole trader, you may work alone or you might employ others. Regardless, you will have a series of expenses, many of which qualify for tax relief. 

Here’s your guide to allowable expenses that you can claim as part of self assessment. This blog is designed as a brief guide, so for more details visit the Gov.uk website, which details the types of expenses you can claim if you are self employed. 

What are allowable expenses? 

Here’s a round-up allowable expenses: 

Business premises 🏢

If, like many sole traders, you operate from home you can claim tax on the proportionate costs of your home bills for heating, powers, council tax and mortgage interest, relating to your business. 

Office supplies and phone bills 📱

You can claim for business stationery and supplies, plus business printing costs such as ink and paper. Your online costs are also claimable. If your phone and internet bills include personal usage, HMRC will expect you to divide these costs accordingly. 

Professional and financial service fees and charges 👩‍💼

The cost of professional advice for your business, such as a solicitor or accountant is tax deductible, and you can also request tax relief on banking and loan charges. 

Staff and employee costs 💰

Tax relief is available on documented staff costs, including salaries, pensions, staffing costs and NI payments.  

Travel costs 🚆

There is a range of allowable expenses for travel and accommodation, but these need to be strictly for business related portions only.

Tax relief is claimable if you use a vehicle/s as part of your business, including fuel, parking, insurance, repairs, servicing and breakdown cover. Worth reminding you that tax relief is only for the business-related proportion of these costs. 

Read our blog 'What you need to know: How to claim mileage as a business expense' here

Clothing 🦺

In order to claim for clothing, it needs to be specific protective clothing, or a uniform which identifies what you do. You cannot claim for ordinary clothing, such as a business suit.

Stock and materials 🧱

Tax relief is available on the following allowable costs: stock, raw materials and the costs of making goods. 

Marketing and advertising 💻

The costs to market your business are allowable and can include print marketing, advertising costs and website hosting costs. Membership fees for a trade body/ies are also allowable costs and can be claimed. 

How can sole traders manage their expenses?

Keeping track of your expenses can be a headache, especially if you employ staff. Savvy sole traders are embracing technology like Expend to help manage, control and integrate their expenses data into accounting packages such as as Quickbooks or Xero.  

AI technology drives the Expend Mobile App, allowing sole traders to manage and authorise their employees’ expenses with ease, and without the need for complex paper-based claims processes. 

And employee cards from Expend provide the ability for employees to make approved purchased with a prepaid Mastercard. You can set spending limits on cards, restrict ATM withdrawals or online transactions, and even block spending in certain sectors, such as pubs or bars - leaving no room for misuse.

Disclaimer: This is not legal, accounting, or tax advice - it's simply a guide. If you need help, check with your accountant or contact HMRC directly.