What Expenses Can I Claim as a Self-Employed Individual?

PHS Team

31 Jul, 2025

If you work for yourself, whether as an individual, sole trader, self-employed person, or freelancer, knowing which expenses you can claim is crucial to paying the right amount of tax. Claiming allowable business expenses reduces your taxable income, meaning you only pay tax on what you earn after costs.

This guide, based on HMRC rules and expert advice, explains what expenses you can claim, how to handle working-from-home costs, and answers common questions relevant to you.

How Can Claiming Business Expenses Reduce Your Tax?

As a self-employed individual, all your income above the personal allowance (£12,570 for the 2025/26 tax year) is taxable. However, HMRC allows you to deduct the costs you incur wholly and exclusively for your business before calculating your tax bill. These are called tax-deductible expenses or allowable business expenses.

For example, if you earn £60,000 in a year and have £5,000 of allowable expenses, your taxable income becomes £42,430 after deducting your allowance and expenses. Without claiming expenses, you would pay tax on £47,430, so claiming expenses can save you money.

Common Allowable Expenses You Can Claim

Here’s a list of the most common expenses you can deduct from your income:

1. Office Supplies

• Stationery (paper, pens, printer ink)
• Postage and delivery costs
• Phone and internet bills (business portion only)
• Software subscriptions or software used for less than two years

2. Office Equipment

• Computers, printers, and other hardware (if you use cash basis accounting)
• Software used for more than two years (may require capital allowances if using traditional accounting)

3. Business Premises

• Rent for business premises or workspace
• Utilities such as electricity, heating, and water for your business premises
• Buildings insurance, maintenance, repairs, and security costs

Note: If you own your business premises, you cannot claim the purchase cost as an expense.

4. Transport and Travel

• Travel costs necessary for your work (excluding commuting to your usual workplace)
• Fuel, parking, tolls, and public transport fares for business trips
• Vehicle insurance and congestion charges for business use
• You can use HMRC’s simplified vehicle expenses to calculate your claim if you drive your own vehicle for work.

5. Legal and Professional Fees

• Fees for accountants, solicitors, financial advisers, or surveyors used purely for business
• Bank charges related to your business accounts

6. Raw Materials and Stock

• Costs of goods you buy to sell on, or raw materials used in your work

7. Marketing

• Website costs and hosting
• Advertising, business cards, flyers, and promotional materials

8. Professional Insurance

• Professional indemnity insurance or other business-related insurance

9. Clothing

• Special clothing is required for your work, such as uniforms or costumes

10. Trade Subscriptions

• Membership fees for trade bodies or professional organisations
• Subscriptions to professional journals related to your work.

What Expenses Can You Claim?

If you work for yourself, understanding which expenses you can claim is essential to reduce your taxable income legally. The rules vary depending on whether you work from home, are a sole trader or self-employed, or a freelancer. Here’s a clear breakdown:  

If you are Working From Home

If your business is run from home, you can claim a proportion of your household costs, including:

• Heating, electricity, water
• Council tax
• Rent or mortgage interest
• Internet and phone bills

You only claim the business-use portion. For example, if your home has five rooms and you use one as an office, you might claim 20% of these bills. Alternatively, you can use HMRC’s simplified expenses flat rate, which calculates allowable costs based on the hours you work from home each month.

If you are a Sole trader or Self-Employed

• Claiming Method: You can either calculate the actual proportion of your household costs used for business or use HMRC’s simplified expenses flat rate method.
• Simplified Expenses Flat Rate: If you work 25 hours or more per month from home, you can claim a fixed amount based on your hours worked:
  • 25 to 50 hours: £10 per month
  • 51 to 100 hours: £18 per month
  • 101+ hours: £26 per month
• This flat rate covers heating, electricity, council tax, and rent, but does not include phone or internet bills, which you must calculate separately.
• You claim these expenses on your Self-Assessment tax return.
• Keep records and receipts to prove your claims if HMRC asks.

If you are a Freelancer

• Freelancers who are self-employed follow the same rules as sole traders.
• You can claim either actual costs or use the simplified expenses flat rate if you work 25+ hours a month from home.
• Keep detailed records of your business use of home expenses and claim these on your Self-Assessment tax return.
• If you operate through a limited company, claiming working-from-home expenses is more complex and may require a formal rental agreement or reimbursement arrangements.

Points to Remember

• You must have a dedicated work area used exclusively and regularly for your business to claim home expenses.
• Keep all receipts, bills, and records for at least five years.
• If you use the simplified expenses method, you don’t need to calculate exact proportions, making it easier to claim.
• Working-from-home expenses reduce your taxable profit, lowering your tax bill.
• If you’re unsure which method suits you best, consider consulting an accountant.

What About the £1,000 Tax-Free Trading Allowance?

If your self-employed income is £1,000 or less per year, you don’t need to register for self-assessment or claim expenses. However, if you expect to have significant expenses, registering and claiming expenses might be worthwhile to reduce your tax bill.

Staying Organised and Getting Help

• Keep clear, organised records of all your business expenses, including digital copies of receipts.
• Use a separate business bank account to track income and expenses.
• Consider using accounting software or apps to simplify record-keeping.
• Regularly review HMRC’s guidelines to ensure your claims are accurate.
• When in doubt, seek advice from an accountant or tax professional to avoid mistakes and maximise your allowable expenses.

Conclusion

Knowing what expenses you can claim as an individual, sole trader, self-employed person, or freelancer helps you keep more of your earnings and avoid paying too much tax. Always ensure expenses are genuinely for business use and keep thorough records to support your claims. If you’re unsure about any expense, professional advice can help you file your self-assessment confidently and correctly.

Frequently Asked Questions