If you are self-employed, you know that every penny counts. That’s why understanding what business expenses you can claim on your Self-assessment tax return is so important. It can reduce your taxable profit and help you keep more of your hard-earned money. But what exactly counts as an allowable expense? Let’s break it down in a simple, straightforward way.
What Are Allowable Business Expenses?
Allowable expenses are costs that are ‘wholly and exclusively’ for your business. These can be deducted from your income before tax is calculated, which means you only pay tax on your actual profit, not on the money you’ve spent running your business.
Common Business Expenses You Can Claim
Here’s a rundown of the typical business costs you can include in your tax return:
Office and Work Essentials
If you buy items you use for work, like stationery, printer ink, postage, and short-term software subscriptions, you can claim them as expenses. If you run your business from home, you can also claim part of your utility bills, internet, and even rent or mortgage interest.
Business Premises Costs
Do you rent an office, studio, or shop? You can claim expenses like rent, business rates, electricity, and maintenance. If you work from home, you can still claim a portion of your bills (more on that in a sec!).
Travel and Vehicle Expenses
If you travel for work, whether it’s meetings, site visits, or networking events, you can claim transport costs, including fuel, parking, train, bus, and taxi fares. If you use your own car for work, you can either claim actual costs (like fuel and maintenance) or use HMRC’s simplified mileage rate.
Stock and Materials
If you sell products, any raw materials, stock, or goods you purchase for resale can be claimed as expenses.
Professional and Legal Fees
Hiring an accountant or a solicitor? Their fees are tax-deductible, as are costs like business bank charges and interest on business loans.
Business Insurance
Public liability insurance, professional indemnity insurance, or any other policies that protect your business are all allowable expenses. Need business insurance? click here.
Marketing and Advertising
Your website, social media ads, business cards, and any other promotional activities? Yep, those can be claimed too!
Staff Costs
If you have employees, their wages, pensions, benefits, and employer National Insurance contributions are all tax-deductible.
Memberships and Subscriptions
If you subscribe to trade journals or are a member of a professional organisation, you can claim the cost as an expense.
What About Simplified Expenses?
If all of this sounds like a headache, there’s good news. HMRC offers simplified expenses, which let you claim a flat rate for certain costs instead of keeping detailed records. This applies to:
Business mileage – Instead of tracking every fuel and repair receipt, claim a set amount per mile.
Working from home – If you work from home for more than 25 hours a month, you can claim a fixed amount instead of working out individual costs.
Living at your business premises – If you run a B&B, pub, or similar, you can use simplified expenses to separate business and personal costs.
How Strive Business Limited Can Help
We know that keeping on top of your finances can feel overwhelming. That’s why we offer automated bookkeeping services and access to a trusted network of accountants. We make expense tracking easy with Dext Prepare, a powerful tool that simplifies recording and managing your business expenses. Whether you're just starting out or looking to streamline your financial processes, we’re here to help.
Dext Prepare makes expense tracking effortless by allowing you to capture and categorise receipts, invoices, and financial documents in seconds. You can simply snap a photo of a receipt using the mobile app, forward digital invoices via email, or upload documents directly to the platform. The software extracts key details like date, supplier, and amount, then automatically organises them into categories that align with your accounting software.
With built-in integrations for platforms like Xero, QuickBooks, and Sage, Dext Prepare ensures that all your expense data is synced in real-time, reducing manual entry and the risk of errors. It also offers features like automated bank reconciliation, multi-user access, and tax-ready reports, making it a game-changer for self-employed professionals who want to stay on top of their finances without the hassle.
Keep Good Records!
No matter what expenses you claim, keeping good records is essential. Save receipts, invoices, and bank statements so that if HMRC ever asks, you’ve got proof of what you’ve claimed.
Final Thoughts
Understanding what you can and can’t claim can save you a lot of money and make tax time much less stressful. Whether you opt for detailed record-keeping or go for simplified expenses, make sure you’re claiming everything you’re entitled to. It’s your money, after all!
Need more info? Check out HMRC’s guidelines or speak to us here at Strive Business Limited to make sure you’re getting it right.
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