What Expenses Can I Claim as a Sole Trader?

The short answer

• ✓ The test: a cost is allowable if it's wholly and exclusively for your business. For mixed-use costs, claim the business share only.
• ✓ Mileage: 55p a mile for the first 10,000 business miles in a car or van from 6 April 2026, then 25p.
• ✓ Working from home: a flat £10, £18 or £26 a month depending on your hours, or the actual business share of your bills.
• ✓ Small costs: if your expenses are under £1,000 a year, the £1,000 trading allowance may be simpler.

All rates in this article were checked against GOV.UK on 1 October 2026.

What is the "wholly and exclusively" rule?

An expense is allowable if it is wholly and exclusively for the purposes of your business. That test, rather than any list of categories, is what HMRC applies.

If something is used for both business and personal purposes, like your phone or your home, you can normally claim only the business share, not the full cost.

The rule underpins almost everything below. When you're not sure, ask whether the cost would exist at all if you weren't running the business.

What expenses can you usually claim?

• ✓ Office costs — stationery, phone and internet bills (business proportion), software subscriptions
• ✓ Travel costs — fuel, parking, train and bus fares, hotel stays for business trips
• ✓ Clothing — uniforms and protective clothing needed for your work, not everyday clothing
• ✓ Staff costs — salaries, subcontractor fees, employer's National Insurance, pension contributions
• ✓ Stock and materials — items you buy to sell on, or raw materials used to make your product
• ✓ Financial costs — bank charges, interest on business loans, insurance, accountancy fees
• ✓ Business premises — rent, business rates, utility bills, and running costs for a workspace
• ✓ Marketing — advertising, your website, business cards, and trade subscriptions
• ✓ Training — courses that maintain or update skills you already use in your business

This isn't a complete list, and the treatment can depend on your circumstances. HMRC's guidance on self-employed expenses has the full detail.

How do you claim for working from home?

If you work from home, you have two options. Pick one for a given cost rather than mixing them:

• ✓ Simplified flat rate — £10 a month for 25 to 50 hours, £18 for 51 to 100 hours and £26 for 101 hours or more, set out in HMRC's simplified expenses for working from home. It doesn't cover phone and internet, which you claim separately.
• ✓ Actual costs — working out the genuine business proportion of your household bills (heating, electricity, internet, and so on), usually based on the number of rooms used and the hours spent working

The flat rate is simpler, and you only need a record of your hours. If your household costs are high, working out the real business share can be worth more.

How do you claim for using your own car?

Most sole traders find HMRC's flat mileage rates simpler than tracking every fuel receipt and running cost. The car and van rate rose from 45p to 55p a mile from 6 April 2026:

• ✓ 55p per mile for the first 10,000 business miles in the tax year (cars and vans)
• ✓ 25p per mile for any business miles after that
• ✓ 24p per mile for motorcycles

The rates are on HMRC's page on simplified expenses for vehicles. Ordinary commuting to a regular, permanent place of work doesn't count as business mileage.

Once you use the mileage method for a vehicle, you must keep using it for as long as that vehicle is in the business.

What can't you claim as a sole trader?

A few common ones catch people out:

• ✓ Client entertaining — meals, drinks, or events for clients aren't allowable, even though staff entertaining sometimes is
• ✓ Everyday clothing, even if you only wear it for work
• ✓ Fines and penalties, including parking tickets
• ✓ Personal expenses with no genuine business purpose

When is the £1,000 trading allowance a better option?

If your allowable expenses for the year come to less than £1,000, the trading allowance is often simpler. You deduct a flat £1,000 from your trading income instead of claiming individual expenses.

If your real expenses are more than £1,000, claiming them usually saves more tax. You have to choose one or the other for that income, not both.

What records do you need to keep?

Whatever you claim, keep the evidence: receipts, invoices and bank statements. HMRC says to keep records for at least 5 years after the 31 January deadline for the tax year.

Good records are also the difference between claiming everything you're entitled to and quietly under-claiming because you're unsure. In our experience, under-claiming is far more common than over-claiming.

For the full list of records, including VAT and payroll, see our guide to bookkeeping records for small businesses.

The bottom line

If a cost exists only because of your business, you can usually claim it. Claim only the business share of anything you also use privately, use the flat rates where they save you work, and keep the evidence for at least 5 years.

How REYS Accountants can help

We're a small practice in Catford, SE6. Expenses are one area where a second pair of eyes pays for itself, by catching costs people miss and keeping you within HMRC's rules.

As your sole trader accountant, we review your expenses as part of your Self Assessment return, and our bookkeeping service can organise your records first. Tradespeople should see our page for builders and trades in Bellingham and Downham. Get in touch if you're not sure whether something qualifies.

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