Allowable expenses are the business costs you can take off your income before HMRC works out the tax you owe. They lower your taxable profit, which lowers your Income Tax and Class 4 National Insurance.

The rule is simpler than people think, but it has one catch. A cost is allowable only if it’s spent wholly and exclusively for your business. Not “mostly”. Not “it was useful”. If a cost is part personal and part business, you can only claim the business share.

So the real question for each expense is: was this for the business, can you prove it, and have you recorded it.

The £1,000 trading allowance comes first

Before the list, one decision. HMRC gives every self-employed person a £1,000 trading allowance. You either claim that flat £1,000 and deduct nothing else, or you claim your actual expenses. Not both.

If your costs for the year are under £1,000, take the allowance and move on. If they’re more, list your expenses. Most freelancers with software, a coworking desk or an accountant pass £1,000 quickly, so the list below is what matters for them.

The basic conditions

Condition	What it means
Wholly and exclusively for business	The cost has to be for the trade, not personal use.
You have the record	A receipt or invoice you can show if HMRC asks.
It’s logged	Written down in your books or a tracking app, not reconstructed in January.
Business proportion only	For mixed costs, claim the work part and nothing else.

The common allowable expenses

Office costs and supplies

Stationery, printing, postage, phone bills and the day-to-day things you use to run the business. Software, hosting, domains and online subscriptions count too, as long as you use them for work and have the invoice.

Equipment and tools

Laptops, monitors, phones, cameras, tools. Here’s the part that trips people up: equipment with a long life is usually claimed as a capital allowance, not as an ordinary expense. The full cost often goes through the Annual Investment Allowance in the year you buy it, but it sits in a different box from your running costs. Check which applies before you assume you can deduct the lot in one go.

Accountancy and professional fees

Accountants, bookkeepers, tax advisers, solicitors and other professional services tied to your work are allowable. So are things like web maintenance, design work or specialist support you pay for to keep the business running.

Travel and vehicle

Train fares, bus tickets, parking, business mileage. For a car you have two routes. You can use HMRC’s simplified flat mileage rate, or you can claim the actual running costs and capital allowances. Pick one per vehicle and stick with it.

Simplified mileage rates (2025/26):

Vehicle	Rate
Cars and vans, first 10,000 business miles	45p per mile
Cars and vans, over 10,000 miles	25p per mile
Motorcycles	24p per mile

Working from home

Two options again. The simplified flat rate, based on how many hours a month you work from home:

Hours worked from home per month	Flat rate
25 to 50	£10 per month
51 to 100	£18 per month
101 or more	£26 per month

The flat rate does not cover phone and internet. Claim the business share of those separately. The other option is to split your actual home running costs by the proportion you use for work. The flat rate is less paperwork; the proportion method can be worth more if your bills are high.

Phone and internet

Allowable for the business portion. If one line covers both work and home, claim only the part you can justify. A separate business line or contract keeps this clean.

Training

Courses, books and training that maintain or update the skills you already use in your business are allowable. Training to start a brand new line of work is treated differently and often isn’t, so keep the connection to your current trade clear.

Marketing and website

Advertising, your website, SEO, business cards, photography. Costs to find clients and keep your professional presence running.

Insurance and financial costs

Professional indemnity and other business insurance. Bank charges on a business account, payment processing fees and interest on business borrowing.

Food and meals: be careful here

There’s no daily meal allowance for sole traders. Everyone has to eat, so a normal lunch isn’t “wholly and exclusively” for the business. What you can claim is the reasonable cost of food and drink when you’re travelling for work away from your usual base, and meals and accommodation on overnight business trips. Keep the receipt and note why the trip was for work.

VAT: only matters if you’re registered

If you’re not VAT registered, you don’t charge VAT and you can’t reclaim it. The VAT you pay on purchases is just part of the cost, and you claim the gross amount as your expense.

If you are registered, VAT works on a separate track. You reclaim the VAT on business purchases against the VAT you’ve charged clients. You have to register once your taxable turnover passes £90,000 in any rolling 12 months.

So look at each cost with two questions if you’re registered: does it lower my profit, and can I reclaim the VAT.

A quick example

Say you invoice £40,000 in a year (you’re not VAT registered) and you have these costs:

Cost	Amount
Software and tools	£900
Coworking desk	£2,400
Accountant	£600
Business mileage (2,000 miles at 45p)	£900
Marketing	£500
Total	£5,300

Your taxable profit is:

£40,000 income - £5,300 expenses = £34,700 profit

You’re taxed on £34,700, not on £40,000. The expenses didn’t “get money back”. They moved the number HMRC taxes down by £5,300, and the tax saved is a share of that. What’s left after you set aside Income Tax and National Insurance is the money you can actually use.

Common mistakes

Claiming a personal cost just because it went through the business account.
Keeping a card receipt instead of a proper invoice.
Deducting equipment as a running cost when it should be a capital allowance.
Claiming a full home or phone bill when only part is for work.
Logging nothing until the deadline, then guessing.

A good test: if you couldn’t explain the cost in a review, don’t build your tax planning on it.

How this connects to what you can spend

The point of tracking expenses isn’t only paying less tax. It’s knowing your real profit, so you know what’s safe to spend.

Income
- business expenses
= real profit
- tax and National Insurance to set aside
= roughly what you can actually spend

That last number is the one that matters week to week. If you’d rather not rebuild it in a spreadsheet every time, the UK freelancer tax calculator estimates it for you, and how to calculate your freelance taxes in the UK walks through the full sum.

In short

You can claim a lot as a UK freelancer, as long as each cost is for the business, recorded, and backed by a receipt. The goal isn’t to squeeze the list. It’s to have an honest picture of your profit, so you know how much to set aside and how much is genuinely yours.

This is general information based on public HMRC rules. For your own situation, check with a qualified accountant.

Allowable expenses for self-employed freelancers in the UK: the full 2026 list