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Hello, I’m Sara, a Chartered Accountant who transitioned into running an online business. I understand just how daunting and confusing it can be to take the leap into self-employment. The questions, the uncertainties, and the steep learning curve are all challenges I’ve faced myself. Whether you’re in the early stages of planning to go self-employed, just dipping your toes into making money on your own terms, or already fully committed, this blog is dedicated to helping you every step of the way. Through detailed guides, expert tips, and practical advice, I aim to be your go-to resource. From mastering financial management and navigating tax obligations to setting up the foundations of your business, I’m here to provide you with the clarity and confidence you need to thrive in your self-employment journey.
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The Ultimate List of Self-Employed Expenses You Can Claim
What Are Allowable Business Expenses?
In simple terms, self-employed expenses are costs incurred in the course of running your business. For example, paying for a business email subscription would be a business expense because you wouldn’t need it if you weren’t self-employed.
Detailed List of Allowable Self-Employed Expenses
For an expense to be allowable, it must be wholly and necessarily incurred for business purposes. Here’s a comprehensive list of common allowable expenses:
Self-Employed Allowable Expenses
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Stock and Raw Materials
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Wages, Subcontractors, and Freelancers
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Office Rent
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Website Costs
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Travel Expenses*
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Mileage**
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Vehicle Costs***
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Home Office****
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Clothing*****
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Food and Subsistence******
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Marketing and Advertising
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Telephone and Internet
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Insurance
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Trade or Professional Journals
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Training and Courses
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Business Subscriptions
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Professional Fees
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Payment Processing Fees
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Bank Charges and Interest (business accounts only)
Notes:
*Travel expenses must be related to business activities, such as visiting clients or suppliers, attending training, or staying overnight for work. Parking charges can be claimed, but parking fines cannot.
**Mileage rates are currently 45p per mile for the first 10,000 miles and 25p thereafter, covering fuel, servicing, tax, and depreciation. Keep a log of business mileage.
***If you purchase a car through your business, you can claim a portion of the cost or lease payments based on business use.
****Home office expenses can be claimed using a flat rate or by calculating actual household bills based on business use.
*****Branded uniforms are claimable; non-branded clothing is only claimable if required for safety reasons.
******Food expenses are claimable when traveling for business but not for client entertainment.
[Related Reading: A Guide to Claiming Business Travel]
What Are Allowable Business Expenses?
Expenses can be categorized as either:
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Allowable Expenses: Costs that HMRC allows you to deduct from your tax bill.
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Disallowable Expenses: Costs that you may incur as a result of being self-employed but cannot claim for tax purposes.
Examples of disallowable expenses include personal expenditures, certain clothing, fines, entertainment, commuting from home to office, and drawings (or paying yourself as a sole trader).
[Related Reading: Disallowable Expenses Explained]
What Does ‘Claiming Business Expenses’ Mean?
When self-employed, your tax and national insurance are calculated based on your business profits:
Business Profits = Business Income – Allowable Business Expenses
For tax purposes, this is the basic equation. So, if your business earns £1,000 and your allowable expenses total £400, you’ll only pay tax on £600 (£1,000 - £400).
[Related Reading: Self Employed Tax: An Easy Guide for Beginners]
What Are Self-Employed Expenses?
In simple terms, self-employed expenses are costs incurred in the course of running your business. For example, paying for a business email subscription would be a business expense because you wouldn’t need it if you weren’t self-employed.
Table of Contents
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What Are Self-Employed Expenses?
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What Does ‘Claiming Business Expenses’ Mean?
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What Are Allowable Business Expenses?
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Detailed List of Allowable Self-Employed Expenses
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How to Claim Self-Employed Expenses on Your Taxes
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The Importance of Keeping Receipts
Are you wondering what expenses you can claim as a self-employed individual? How do you go about claiming them, and what benefits can you expect from HMRC? This guide covers everything you need to know about self-employed expenses, including a detailed list of allowable costs.
Friendly Disclaimer: While I am an accountant, I’m not your accountant. The information provided in this article is accurate and serves as general guidance. However, every situation is unique, so you should apply the advice based on your specific circumstances. If you’re unsure or need further clarification, consult a qualified professional, as errors can lead to penalties.