What Expenses Can a Sole Trader Claim? The Complete UK Guide

One of the most valuable — and most overlooked — ways to reduce your tax bill as a sole trader is to claim every business expense you’re legally entitled to. Yet HMRC data consistently shows that self-employed people across the UK underclaim, missing out on deductions that could save them hundreds or even thousands of pounds each year.

In this guide, I’ll explain exactly what expenses a sole trader can claim, how HMRC determines what counts as “allowable,” and the mistakes that most commonly lead to either overpaying tax or triggering a compliance check.

What Makes an Expense “Allowable”?

HMRC’s rule is straightforward in principle: an expense is allowable if it is incurred “wholly and exclusively” for the purpose of your trade or business. The key questions HMRC will ask are: Was this cost necessary for the business? Was it used entirely for business purposes, or partly for personal use? Could you justify it to a tax inspector?

The Full List: What Expenses Can a Sole Trader Claim?

1. Office and Administration Costs

• Stationery, printer ink, and postage
• Computer equipment and software (subject to capital allowances)
• Business broadband and phone bills (business portion only)
• Accounting software subscriptions

2. Travel and Vehicle Costs

• Mileage for business journeys (45p/mile for first 10,000 miles, 25p thereafter)
• Public transport fares for business travel
• Parking fees and tolls during business journeys
• Overnight accommodation for genuine business trips

3. Marketing and Advertising

• Website hosting and domain registration
• Social media advertising
• Business cards and printed materials

4. Professional Fees

• Accountancy fees
• Legal fees for business-related matters
• Professional subscriptions relevant to your trade

5. Insurance

• Professional indemnity insurance
• Public liability insurance
• Business contents insurance

6. Training and Professional Development

You can claim the cost of training or courses that update existing skills directly related to your current trade. You cannot claim for training that qualifies you for a new career or profession.

Working From Home: What Can You Claim?

Method	How it works	Best for
Flat rate	£10–£26/month based on hours worked from home	Simple cases
Actual costs	Proportion of rent/mortgage interest, utilities, council tax	Higher earners

What You Cannot Claim as a Sole Trader

• Your own wages or salary
• Personal clothing (unless a uniform or protective equipment)
• Entertainment costs — client lunches are not allowable for sole traders
• Fines or penalties, including HMRC penalties
• Personal travel costs, including commuting

“Most of my new clients are surprised by how much they’ve been missing. Office supplies, phone bills, training courses, professional subscriptions — the savings add up very quickly once you know the rules.”

Common Mistakes That Lead to HMRC Enquiries

• Claiming personal costs as business expenses — the most common trigger for HMRC enquiries
• Not keeping receipts — HMRC can ask for evidence going back six years
• Claiming the full cost of mixed-use items — a phone used 70% for business can only be claimed at 70%
• Forgetting capital allowances — expensive equipment must often be claimed over multiple years

Are You Claiming Everything You’re Entitled To?

As an accountant based in Dagenham, I work with sole traders across London and the UK to review their expenses, identify missed deductions, and ensure their Self Assessment returns are both compliant and tax-efficient. Every client receives a clear, transparent quote before any work begins.