Self-Employed Allowable Expenses you can Claim on

Self-Employed Allowable Expenses you can Claim

Working for an organization or a company comes with its own set of privileges and accomplices. However, not much can be told about the individuals who are self-employed or freelancers. But did you know that allowable expenses can be greatly reduced by your self Assessment tax bill? Yes, as there are various Self-employed allowable expenses you can claim. So, let us take a look at some of the ways in which you can have your business work for you.

The Income Tax Relief: Claim your Business Expenses to Reduce your Taxes

When and if you are working as a freelancer or a sole trader, it is essential that you have a general understanding of the basic allowable expenses. This can be applicable to something as simple as paying an accountant to help you with your tax returns. There are certain aspects of running your businesses in which you can claim your tax back. This also comprises what HMRC calls allowable expenses. These are usually available as costs within your business accounts deducted from the profit that you are supposed to pay the taxes on. There are cases when the expenses can significantly reduce the average sole trader’s tax bills. For instance: in case your turnover is £80,000 and you claim £20,000 in allowable expenses, you only pay tax on the remaining £60,000—a substantial saving.

One can also use simplified expenses for the same. With the help of these flat rates, one can usually calculate tax relief rather quickly on vehicles, working from home, and also living on your business premises. This can make working your expenses quite easier.

Read More-: Earned Income Tax Credit

The Self-Employed Allowable Expenses List

Let us take a look at some of the things you can claim for. In this case, it is assumed that you will be using cash basis accounting, as the rules for traditional accounting are quite different. These figures can be added to the self-assessment tax returns:

Office Equipment and Tools

There are certain office tools and pieces of equipment that you can lay your claim on, some of these includes Printers, PCs, Laptops, and Computer Software that you might need for your daily work from home, or that your business has made use of for less than two years. However, bear in mind that you cannot claim tax back on small tools.

Communications and Stationary

These include various aspects of utilities like regular paper, envelopes and pens. Also, the individual can claim tax back on postage, and printing, also including printer ink and cartridges that is used as a part of your business or work from home. Now, that more and more businesses are thriving and shifting over to online platforms, you can also claim allowances for electronic communications, as well these include business phones, internet bills and mobile.

Phone and Internet

In case your business involves the use of mobile, phone and internet for business and personal use, then you will need to demonstrate a realistic way of being able to divide the costs and can claim tax back only on the part that is used for the business. In case you cannot show this, then you cannot claim any tax back on the same.

Professional and Financial Services

In case your business requires advice from an accountant, lawyer or any other professional, then you can claim tax back on their fees as well. Likewise, you can also claim allowable expenses for hiring surveyors and architects for your business. This applies not just to personal home improvements. 

In case you own a business accounts books, you are also entitled to claim tax relief from the bank. Credit card or overdraft charges or interest on business loans. One can also claim tax back on hire purchase, financial payments or lease for the pieces of equipment that you use for or in your business.

The Pension Contributions

One must bear in mind that the pensions are not a part of your business, hence they do not affect your self-employment profits. Nevertheless, you are eligible for tax relief on any contributions you make, which your pension provider will automatically claim.

The Staff and Employee Costs

One can also claim tax relief on staff and employee salaries, bonuses, pensions, benefits, employee costs, the agency fee, subcontractors and the employer’s National Insurance contributions.

The Travel Costs

There are various allowable expenses that one can claim if your business involves travelling. This includes train, bus, taxi, airfares, and accommodation costs as well. However, one must bear in mind that these costs can only be borne if the primary nature and purpose of your business comprise travelling alone. In case you are travelling for business and pleasure, you can only claim taxes for that part of your journey that is related to your business and can show it separately from your private stay. Also, it is important that you bear in mind that you cannot claim the costs if you are not able to ‘show’ the expenses done on your business as you travel or stay at a place

The Transportation Costs

In case your business comprises travelling using transport then, the individual can claim tax relief for various expenses like repairs, insurance and petrol.

Mileage Allowance

If you are a self-employed individual then you can combine all the motor expenses for the year and work out the separate business element of the total cost. But, this can take time to work out the exact calculation. 

But claiming a Mileage allowance can simplify the expenses and can allow the individual to calculate the cost of running your means of transportation. The other transport-related areas where you can claim the expenses include:

  • Breakdown cover
  • Parking
  • Hire Charges

Once again bear in mind that the tax relief is applicable only if these aspects are business-related instead of private. Also, you need to understand that one cannot claim the tax back on parking other than the fine incurred while driving. Finally, there is no tax relief for breaking the law.

Food And Clothing

Food and clothing expenses can be claimed only if the nature of your work and business requires or involve the use of clothing and food. However, if you need to buy a uniform that identifies what you do or requires special protective clothing to do your work, then you can claim that. Also, you cannot claim for non-uniform pieces like shoes or socks. 

Likewise, in case you are an entertainer and your work profile requires you to put on a costume, or a special piece of clothing then you can claim the taxes for this. Some examples of this work profile comprise Acrobats, Clown and Magicians.


In the case of special protective gear or uniform, you can claim taxes for washing, replacement or repairs.


This can be claimed as taxes if your work requires you to dine out with clients and other associates related to your business.

Stock and Materials

One can claim tax back on the following:

  • Items that you resell, e.g. stock
  • Raw materials that you use to make goods for sale
  • Direct costs from producing goods.

Advertising and Marketing

In case your business involves hosting and maintaining the company website then you can claim back the cost of advertising and marketing of your business. However, this needs precise differentiation, between ‘entertaining’ a friend for lunch to having a supplier over for a meal during any business-related discussion. 

Likewise, you need to know that if you are a member of a professional trade body or an organization which is a part of your business, then you can claim tax relief on the membership fee. Also, subscriptions to trade and professional journals are considered to be allowable expenses and can be claimed too.

Also Read-: Tax Deductions Breaks in 2022


So, there you have it people, these are some of the main aspects when you need to know about the Self-employed allowable expenses you can claim on. However, if you still have doubts about the same, you can reach out to our team of experts at: + 1800-964-3096 or drop a mail at [email protected] or join our LIVE sessions for more details at

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Frequently Asked Questions (FAQs)

What are the kinds of Expenses one can Claim when working from Home?

When you are the sole member of your organization, or if you run your business from home, then you can claim the tax back on the portion of those expenses that are related to the space that you use for your business or work. This can include heating, electricity, council tax and mortgage interest.

How are the Allowable Expenses Tracked?

One needs to track their business expenses throughout the year and also maintain well-organized records. In case you are the sole trader, then it is necessary that you maintain the record for five years after 31st January of the relevant tax year. Essentially it is recommended that you use accounting software in order to save time and also offer accuracy for the same. Also, the paper receipts can be snapped and stored digitally for future reference.

How does one claim the Self-employed Business Expenses?

One needs to work out all that you can claim back and add the details to the tax returns. It helps a lot to keep your expenses well-organized, as it will help make this process all the easier.

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