What expenses can you claim as a sole trader?
Does MTD apply to you yet?If you're a UK sole trader, you deduct the costs of running your business from your income before tax is worked out. HMRC calls these allowable expenses: costs incurred wholly and exclusively for the business. Claiming everything you're entitled to is the simplest legal way to stop overpaying tax, and lost receipts are where most people quietly leak money.
What you can claim
The everyday categories, with the examples HMRC's own rules point to:
| Category | What it covers |
|---|---|
| Materials and supplies | Timber, paint, fabric, ingredients, hair colour. The things that go into the work or get used up doing it. |
| Tools and equipment | Drills, saws, a camera, a salon chair, and repairs to them. |
| Vehicle | Either the actual running costs of your van or car, or HMRC's flat rate per business mile. One or the other, never both. |
| Travel | Parking, tolls, congestion charge, trains, taxis. Claimable on top of mileage. |
| Phone and internet | The business share of your phone and broadband. |
| Office, software and stationery | Printing, postage, paper, and software subscriptions. |
| Advertising and marketing | Ads, flyers, signage, listings, your website, free samples, and giveaways with your logo on. |
| Subscriptions | Trade or professional journals, and trade body membership linked to your business. |
| Insurance | Public liability, professional indemnity, tools cover. |
| Premises | Workshop or unit rent, business rates and utilities, or the working-from-home flat rates. |
| Subcontractors and staff | A subbie, a labourer, a freelancer you bring in. |
| Professional fees | Accountant, bookkeeper, solicitor, surveyor. |
| Bank and finance charges | Account fees, card-reader fees, interest on business borrowing. |
| Training | Keeping existing skills current: refreshers and ticket renewals. Not learning a brand-new trade. |
The ones that catch people out
Client entertaining: no. Meals, drinks, event tickets or hospitality for clients, suppliers or customers are not claimable. It's the most commonly mis-claimed expense in the country. HMRC's exceptions: a staff event where your employees are the main attendees, food or drink for your employees, and food or drink that is part of the service you sell.
Everyday clothes: no, even if you only wear them for work. A suit or a shirt for meetings is not claimable. Protective gear, overalls you only wear for work, and uniform that isn't everyday clothing are, and so is cleaning or repairing them.
Giveaways: logo items, up to £50 a person. Free samples of what you sell count. Things you don't sell count when they carry your business name or logo, up to £50 per person each tax year, and not food, drink or tobacco.
Commuting: no. Job sites: yes. Travel between home and a regular workplace is not a business journey. Travel to temporary job sites, between jobs, or to pick up materials is.
An ordinary lunch: no. Food on a normal working day is on you. Meals and a place to stay when you're working away overnight are claimable.
A brand-new skill: no. A refresher or renewal for the trade you're in is claimable. A course to enter a different line of work isn't.
What a claim is actually worth
An expense reduces your taxable profit, not your tax bill pound for pound. A £100 expense doesn't hand you £100 back: for a basic-rate trader paying 20% Income Tax plus 6% Class 4 National Insurance, £100 of allowable expenses saves about £26 in tax. Real money, just not the sticker price. Anyone promising you the full amount back is selling something.
Quick answers
Can I claim a phone I also use personally?
Yes, the business share. If roughly half your calls and data are work, half the bill is a business expense. Pick a fair split and apply it consistently.
Can I claim lunch with a client?
No. Entertaining clients, suppliers or customers isn't claimable, however genuine the business reason. Record it, claim nothing.
Do I need to keep receipts?
Yes. Your records must back up every figure on your return, kept for at least 5 years after the 31 January deadline. Under Making Tax Digital the records themselves are digital: amount, date and category for every transaction.
What is the trading allowance?
The first £1,000 of self-employment income in a tax year is tax free. It matters most when you're starting out or earning on the side.
Get all of this handled for you
Snap receipts as you get them. Drive like you always do. Invoice from your phone. SoleTax turns all of it into MTD-ready digital records, and shows the tax building as you go. 14 days free, no card needed.
Start your free trialSources: HMRC's SA103F Notes (2026 edition), the Business Income Manual, and gov.uk guidance on expenses if you're self-employed. Checked on 4 October 2026.