Sole Trader Expenses 2026/27: What You Can Claim

Last reviewed: 21 August 2026.

If you are a UK sole trader, allowable business expenses reduce the profit on which you pay Income Tax. The starting point is that the cost must relate to running your business. Personal spending is not allowable, and if something has both business and private use, you can claim only the business part.

This guide explains the main expense categories, mixed-use costs, working from home and the records to keep. It is general information rather than personal tax advice.

Sole trader expenses at a glance

Cost	Usually relevant when	Watch out for
Software and office costs	Used to run or deliver your work	Deduct any private use
Phone and internet	Used for business calls, admin or client work	Claim only a reasonable business proportion
Travel	The journey is for business	Ordinary commuting and private travel are not business costs
Training	It updates or improves skills used in your existing business	Training for a completely new trade may be treated differently
Working from home	You regularly work from home	Choose actual costs or simplified expenses where eligible
Equipment	Needed for the business	The treatment can depend on your accounting method and the item

Common allowable expense categories

HMRC lists several broad categories of costs that may be allowable when they are genuinely connected to your business:

office costs such as stationery, postage, phone bills and software;
business travel costs such as public transport, parking and mileage where the journey qualifies;
staff or subcontractor costs;
stock, raw materials and goods bought for resale;
insurance, bank charges and certain professional fees;
business-premises costs;
advertising, marketing, website hosting and domain costs;
training related to your existing business.

Paying for something from a business bank account does not automatically make it allowable. The purpose of the spending matters. Equally, small recurring costs can add up, so do not overlook legitimate subscriptions, payment-processing fees or stationery.

Mixed business and personal costs

If a bill covers both business and personal use, claim only the business element. For example, if part of a mobile phone bill relates to client calls, keep a reasonable calculation showing how you arrived at the business proportion. Apply the same principle to broadband, vehicles and shared equipment.

A separate account can make transactions easier to identify, although the account itself does not decide whether a cost is allowable. See whether freelancers need a business bank account and the record-keeping guide.

Working from home

You may be able to claim a reasonable business share of costs such as heating, electricity, rent or mortgage interest, Council Tax, internet and telephone use. An actual-cost calculation should use a reasonable method, such as the rooms used and the amount of time spent working there.

Eligible sole traders can instead use simplified expenses for working from home. The current flat-rate method applies when you work from home for at least 25 hours in a month. Telephone and internet costs are not included in that flat rate, so their business proportion is calculated separately. Compare the methods rather than assuming one is always better.

Expenses that need extra care

Clothing: ordinary clothing is generally not allowable simply because you wear it for work; uniforms and protective clothing can be different.
Food: everyday meals are not automatically business expenses. Specific business-travel circumstances may be treated differently.
Travel: distinguish business journeys from ordinary travel between home and a regular workplace.
Training: courses connected to your existing business are different from learning a new trade.
Equipment: cash-basis and traditional accounting can treat longer-lasting equipment differently, and cars have particular rules.
Trading allowance: you cannot also claim expenses if you use the £1,000 trading allowance instead of deducting actual costs.

What records should you keep?

Keep accurate records of business income and expenses and make sure you can identify business transactions. Useful evidence includes receipts, purchase invoices, bank statements and notes explaining any mixed-use calculation. You do not normally send this evidence with your Self Assessment return, but HMRC can ask to see it.

Self-employed records generally need to be kept for at least five years after the 31 January submission deadline for the relevant tax year. Read the Self Assessment guide and sole-trader tax deadlines for the wider filing timetable.

A simple monthly expenses routine

Save receipts and invoices as you receive them.
Match transactions to your bank statement.
Label the business purpose of anything that is not obvious.
Record the private-use proportion of mixed costs.
Review uncategorised transactions before they build up.
Keep your method consistent and ask a qualified professional about uncertain or material claims.

Frequently asked questions

Do allowable expenses reduce a sole trader’s tax bill?

Allowable expenses reduce taxable profit rather than being repaid pound for pound. Your tax result depends on your overall figures and circumstances.

Can I claim an expense paid from my personal account?

The payment account is not the main test. A genuine business cost may still be relevant, but you need clear records showing what it was and why it related to the business.

Can I claim the full cost of my phone or broadband?

Only if the cost is wholly for business. Where there is personal use, claim a reasonable business proportion and keep a note of the calculation.

Official guidance

Important: Freelance Wallet UK provides general information only. It is not financial, tax or legal advice. Check current HMRC guidance or speak to a qualified professional about your circumstances.

Sole Trader Expenses: What You Can Claim in 2026/27