As a self-employed person in the UK, one of the biggest advantages you have is the ability to claim allowable expenses against your income—reducing the amount of tax you owe. However, understanding what you can and can’t claim can be tricky. Claim too little, and you overpay tax. Claim too much, and you risk penalties from HMRC. 

At East London Accountants, we help sole traders, freelancers, and small business owners across the UK navigate their self-assessment tax returns confidently and compliantly. Below is a comprehensive guide to what you can claim. 

What Are Allowable Expenses? 

Allowable expenses are business costs that can be deducted from your income when calculating your taxable profit. HMRC allows these to ensure you’re only taxed on the money you actually make after running your business. 

Common Self-Employed Expenses You Can Claim 

1. Office & Working from Home Costs 

• Rent for business premises 
• Home office portion of rent, council tax, electricity, gas, water 
• Office furniture and equipment 
• Repairs and maintenance 

2. Travel Expenses 

• Mileage for business journeys (45p per mile for the first 10,000 miles) 
• Public transport, taxis, and parking fees 
• Hotel accommodation and meals while travelling 

Note: You can’t claim for normal commuting between home and a regular workplace. 

3. Vehicle Costs 

• Fuel, insurance, servicing, repairs (if used for business) 
• Vehicle lease or purchase (proportion used for business) 
• Breakdown cover 

4. Marketing & Advertising 

• Website design and hosting 
• Business cards, leaflets, promotional materials 
• Online advertising (Google Ads, Facebook Ads) 

5. Staff & Subcontractors 

• Salaries and wages 
• Employer’s National Insurance contributions 
• Freelancer and subcontractor fees 

6. Professional Fees & Training 

• Accountant fees 
• Legal advice related to your business 
• Business-related courses or seminars 

7. Insurance 

• Professional indemnity 
• Public liability 
• Employer’s liability (if applicable) 
• Business contents insurance 

8. Phone & Internet 

• Mobile phone bills (business use portion) 
• Business broadband 
• Software subscriptions (e.g. QuickBooks, Xero, CRM tools) 

9. Bank Charges & Interest 

• Business bank account fees 
• Interest on business loans or overdrafts 
• Credit card charges (if business-related) 

10. Stock & Materials 

• Raw materials and goods for resale 
• Packaging and delivery costs 
• Tools and consumables 

Flat Rate vs Actual Expenses 

HMRC offers simplified expenses for some categories (e.g. use of home, mileage). You can choose either: 

• Flat rate (easier to calculate) 
• Actual costs (may offer bigger savings, but more paperwork) 

We can help you work out which option is more tax-efficient for your circumstances. 

What You Can’t Claim 

Some expenses are explicitly disallowed by HMRC: 

• Personal expenses (holidays, family costs, etc.) 
• Entertaining clients (e.g. restaurant meals) 
• Everyday clothing (unless it’s a uniform or protective gear) 
• Fines and penalties 
• Repayment of your own drawings/salary 

Keeping Good Records 

To claim expenses, you must keep: 

• Receipts and invoices 
• Bank statements 
• Mileage logs and travel records 
• HMRC correspondence and filings 

We recommend using cloud accounting tools (like QuickBooks or Xero) to track these throughout the year. It makes filing your tax return quicker and more accurate. 

How We Help at East London Accountants 

We: 

• Review your business type and industry-specific allowances 
• Help you claim every eligible expense to reduce tax 
• Prepare and file your self-assessment accurately and on time 
• Provide year-round advice to keep you tax-efficient 

With over 20 years of experience, we’ve helped thousands of self-employed people across London and the UK pay only what they owe—and not a penny more. 

Book a Free Self-Employed Tax Consultation 

Not sure if you're claiming everything you're entitled to? Get in touch for a free consultation with East London Accountants. We’ll review your records, identify missing opportunities, and ensure your self-assessment is HMRC-compliant and tax-efficient.