Will Farmer FMAAT 
January 22, 2022

Sole Trader Self Assessment Tax Returns - Allowable Expenses

As a self employed person you will incur various expenses throughout the tax year. It is important that you know what can and cannot be deducted from your income as an expense and the calculations involved - this could make a significant difference to your tax bill! 


Here are some of the main expenses that CAN be claimed; 

- Office Expenses - such as stationary or a mobile phone bill (this can be a percentage of your phone bill if used for business and personal use). 

- Travel - business mileage, parking, toll charges, public transport costs.

- Accommodation and meals relating to business trips. 

- Uniforms - only if protective clothing or costumes in the entertainment industry. You cannot claim for everyday clothes even if you wear them at work. 

- Staff - employees salaries, PAYE, sub-contractor costs, employee training. 

- Items for re-sale - purchase of stock and raw materials. 

- Financial Costs - insurance, bank fees, loan interest. 

- Rent - office rent, office utility bills or working from home allowance.

- Advertising and Marketing. 

- IT Software - including website hosting. 

- Professional Membership Fees - relating to the industry in which the business operates. 

- Items purchased for use in the business (capital allowances) - a business laptop, office furniture, machinery, business vehicle costs. 

- Accountancy Fees. 


Example of expenses that CANNOT be claimed; 

- Any items for solely personal use.

- Travel to and from a single place of work - such as an office. 

- Client Entertainment - food and drink for client meetings.

- Customer Gifts - above £50 per customer per tax year. 

- Parking Fines.

- HMRC Fines and Penalties.