What Expenses Can You Claim as a Sole Trader in the UK

Running your own business as a sole trader means you handle everything yourself, including your accounts and tax returns. One of the best ways to reduce your tax bill is by claiming allowable expenses. But what exactly can you claim? This guide explains what counts as an allowable expense, common expenses you can claim, examples to make it clear, and what you cannot claim. By the end, you’ll have a simple checklist to help you keep track.

Common home office setup for sole traders

What Counts as an Allowable Expense

Allowable expenses are costs you can subtract from your business income before you calculate how much tax you owe. HMRC allows you to claim expenses that are “wholly and exclusively” for your business. This means the expense must be used only for your business, not personal use.

For example, if you buy a phone and use it only for work calls, you can claim the full cost. But if you use the phone for both work and personal calls, you can only claim the part related to business.

Understanding this rule helps you avoid mistakes and keeps your tax return accurate.

Common Expenses Sole Traders Can Claim

Here are some typical expenses sole traders in the UK can claim. These examples cover many small businesses and freelancers.

Travel Costs

Travel expenses are common for sole traders who visit clients or suppliers. You can claim:

• Public transport fares (train, bus, taxi)

• Mileage if you use your own car for business (45p per mile for the first 10,000 miles, 25p after)

• Parking fees and tolls

  
  

Example: If you drive 100 miles to meet a client, you can claim £45 for mileage.

Phone and Internet

If you use your phone or internet for business, you can claim a portion of the bills. If you use them only for work, claim the full amount. Otherwise, work out the business percentage.

Example: Your monthly phone bill is £40, and you use it 60% for business. You can claim £24.

Home Office Costs

Many sole traders work from home. You can claim a part of your household bills as business expenses. This includes:

• Heating and electricity

• Council tax

• Rent or mortgage interest (not the full mortgage payment)

• Internet

  
  

You can calculate this by dividing your home costs by the number of rooms and the time you use the space for work.

Example: If your home has 5 rooms and you use one room as an office, you can claim 20% of your heating and electricity bills.

Equipment and Supplies

Items you need for your business, such as:

• Computers and software

• Tools and machinery

• Stationery and office supplies

  
  

If the item costs more than £200, you may need to claim it as a capital allowance and spread the cost over several years.

Clothing

You can only claim clothing if it is a uniform or protective clothing needed for your work.

Example: A builder can claim safety boots, but a graphic designer cannot claim everyday clothes.

Calculating expenses with receipts and calculator

What You Cannot Claim

It is just as important to know what expenses you cannot claim to avoid trouble with HMRC. Here are some common non-allowable expenses:

• Personal expenses like food, clothes (unless uniform), or holidays

• Fines and penalties, such as parking tickets or speeding fines

• Costs related to buying or improving your home (except for allowable home office costs)

• Money you withdraw from your business for personal use

• Gifts over £50 per person per year (unless for promotional purposes)

  
  

Avoid claiming these to keep your tax return clean and avoid penalties.

Simple Examples to Make It Relatable

Imagine you run a small gardening business from home. You drive to clients’ homes, use your phone to book appointments, and work from a shed converted into an office.

• You can claim mileage for driving to clients.

• You can claim part of your phone bill.

• You can claim a portion of your home heating and electricity bills for the shed office.

• You can claim tools like lawnmowers and gardening gloves.

• You cannot claim your everyday clothes or the cost of your family’s groceries.

  
  

This example shows how everyday costs can be split between personal and business use.

Gardening tools and gloves on grass for sole trader business

Checklist: What You Can Claim as a Sole Trader in the UK

• Travel costs for business journeys (public transport, mileage, parking)

• Phone and internet bills (business proportion only)

• Home office expenses (part of heating, electricity, rent)

• Equipment and supplies needed for your work

• Uniform or protective clothing required for your job

  
  

What You Cannot Claim

• Personal living costs (food, clothes, holidays)

• Fines and penalties

• Home improvements unrelated to business

• Personal withdrawals from business money

• Expensive gifts not for business promotion

  
  

If you keep this checklist handy, you can confidently track your expenses and reduce your tax bill. Want someone to handle your returns? Contact us today for a free quote info@accountancee.co.uk