Self Employed Tax Expenses - What You Can Claim
If you are one of Britain’s four million self-employed people, you will have to submit a self assessment tax return every year.
If you are self-employed, there are a number of tax expenses that you can claim to offset the business profits that you make. The rules can be long and complicated, but our guide explains the main tax allowances that you can claim if you are self-employed.
Allowable tax expenses
In order for expenditure to be allowable, it must be ‘wholly and exclusively’ for carrying on and earning the profits of your business. This means that the sole purpose for the expenditure must have something to do with your business.
HMRC do allow you to get some private benefit from the expenditure and still get tax relief for the amount spent for your business, as long as either:
- the private benefit was incidental and not the reason for the expenditure, or
- you can clearly identify and separate the expenditure between business and private purposes
You can deduct the full amount of your allowable business expenditure from your business income to work out your taxable profits.
Cost of Stock
The money you spend on stock for your business is an allowable tax expense. So, if you run a bookshop, the cost of buying books as stock is an allowable tax expense.
If you employ staff, the cost of their salaries can also be deducted from your business profits. Remember, however, that you cannot typically claim your own wages or drawings as a deduction.
You are allowed to deduct the costs of maintaining your business premises as a tax expense. These may include rent, rates, heating, lighting, repairs and insurance. You can also deduct the business part of these costs if you run your business from home.
Motor and Travel Expenses
If you are self-employed, you can deduct the cost of using your car, motorcycle or bicycle for business purposes. The most common method of claiming motor and travel expenses is to claim a fixed rate for each mile travelled on business, using HMRC’s standard, fixed mileage rates.
If you have taken out a commercial loan specifically for investment in your business, you can claim the costs of this finance as tax expenses (for example, the interest you pay on a bank loan.)
You can deduct the administrative costs of running your business, including advertising postage, stationery, telephone and fax.
If your business involves you joining a professional or trade body – for example if you are an surgeon or a chartered surveyor – you may be able to deduct the cost of joining the appropriate professional association. You may also be able to claim tax expenses for the purchase of trade or professional journals or subscriptions.
Leanne - Wednesday, December 1st, 2010
As a self-employed contractor, can you claim for train/bus travel to get to the work location?
TaxFix - Thursday, December 2nd, 2010
Leanne: You can claim allowable business travel expenses.
Helen Bott - Wednesday, January 5th, 2011
My husband is self employed and I have always done the books but never claimed a wage. Can I back date this to reduce my his tax bill? If so how do I go about it?
moira - Thursday, January 27th, 2011
I am a self employed Domestic support worker, i need the car because i have to do shopping for some clients and take other clients shopping, the car is of course used for personal .would i be able to claim any other tax allowances other than petrol eg road tax and car ins
TaxFix - Thursday, January 27th, 2011
moira: The 40 pence per mile (for the first 10,000 miles) covers petrol and other car related expenses.
Kevin Wilkinson - Thursday, March 10th, 2011
Can I claim union membership fee? I am retired but continue to pay union sub for membership of union.
P O'Brien - Tuesday, March 22nd, 2011
My husband is working as a locum and registered as a PLC. As he is working away from home during the week he has to pay for alternative accomodation (4 nights a week in a mid range hotel). Can he set these accomodation costs in their entirety against his tax? Many thanks
Anca - Thursday, April 7th, 2011
My husband is working in Construction Industry scheme and he is an employee.
Can he claim travel expenses to get to work?
What other expenses can he claim?
Anthony is Confused - Saturday, May 28th, 2011
Can you help. I was told that I can claim 40p oer mile for car use up to 10.000 miles, then it is 25p per mile…But, I was also told that as my car is not a business asset that I can claim an additional 25p per mile for the use of that car. As in I/my business effectively charges 25p for the use of my car for each mile traveled. I do not put in for car tax or car insurance or any fuel, oil, spares and repairs…mot tests and so on.
Is this correct, 25p a mile extra on top of the 40p allowance could mean I am ‘very’ out of I am wrong.
If I can’t do the above, what can I do. I am not a plc, ltd, just a sole trader and my earnings are certainly well under 64K.
Charlie Green - Tuesday, September 20th, 2011
As a self-employed piano teacher am I able to claim the cost of my own tuition fees? – I have to have regular lessons to improve my own ability, without which i could only teach up to a certain grade
lyn - Tuesday, September 20th, 2011
is there a standard set of rates for allowable expenses for items such as tools, clothing, petrol etc. my client has let his books clip for over 3 years now and has no receipts etc. but can obviously still claim these expenses – he is in the construction industry
Steve - Sunday, October 16th, 2011
If you buy a car mainly for the business (an interpreter) can you take charges such as Mot, insurance , maintenance etc for business. Car bought mainly for attending interpreting sessions and only used privately 3 hours /week. Thanks
Greg - Friday, October 21st, 2011
When claiming car travel do I need anything other than petrol receipts?
jane lakeman - Thursday, October 27th, 2011
I am self employed and using my van for business. Can I claim Tax & van Insurance on my self assessment.
I am claiming 40p per mile for petrol, but wonder if the other costs are allowable expenses.
Laura - Sunday, November 13th, 2011
I am Australian and self-employed, needing to travel for work. When I applied for my Indefinite Leave to Remain I had to pau an addition £400 so they did not have my passport for 6 months as I need it for work. Can I claim that additional expense?
Can I claim the whole expense of the visa as I do in reality need it to work.
mrs drakeford - Thursday, November 24th, 2011
how do i work out how much i claim back on a purchase of a car
Neil Davies - Saturday, December 31st, 2011
can I still claim tax relief on an item bought privately for use in my business with no receipt
SJC - Monday, January 9th, 2012
I am doing an online course from a Uni abroad taht is directly related to my business. Can claim back the course fees. THanks!
kevin - Monday, January 16th, 2012
i have payed to pass my hgv1 to carrie on working at a certain campany. while working for an agency,can i claim it back
humphrey Davies - Monday, January 16th, 2012
My partner is going to do all my paperwork, phone calls etc. can I claim for use of home as office and ‘wifes wages’. Also how do I claom for the use of vehicle, by mileage or by fuel receipts?
brian - Thursday, January 26th, 2012
i am self emplyed can i claim my travel to my job etc
Samantha - Friday, February 17th, 2012
Can i claim petrol expenses for travel to and from our holiday cottage whilst painting throughout?.I do realise that i am unable to claim the labour for either myself or my husband.
Maggie - Monday, February 20th, 2012
My sons work in the Construction Industry. Consequently, they do not have a permanent place of work & must travel each day to various construction sites. Is this travel a valid expense ?
Lucas - Monday, March 26th, 2012
I have just started to run car mechanics garage as self employed. I rent a place from local mechanics. They sublet it. They want to introduce a rent book for us. Will it still be allowable expense if I only have this rent book not proper receipts for my rent paid?
Saleem - Tuesday, April 10th, 2012
Can I claim for the purchase of a car. I am a Project Manager (self employed).?
jane antcliff - Friday, April 13th, 2012
if i pay my one and only employee redundancy can i claim it back as a tax expense.
Anca - Thursday, April 19th, 2012
My husband is self employed in the construction industry scheme and I want to know if he can claim part of the rent we are paying where we live. What is the criteria and do you need a separate room to be used as the office and then you can claim how much of the total rent? What if we are in a studio can he still claim some of the rent?
Sally - Tuesday, May 15th, 2012
What expenses can I claim if I return to the same company as I was employed as a self employewd consultant
ash - Wednesday, May 16th, 2012
i am self employed hired by a recruiter to work in a retail store. do i get paye tax and nation ainsurance contribution deducated from my salary? i think every 3 months i get taxed national insurance contribution? and if so at the end of the tax year what do i need to do? how much would it cost me to get an accountant? please explain
Anne - Sunday, June 24th, 2012
Can I claim for private school education for children under the age of 18
Jamie - Wednesday, June 27th, 2012
As I started trading in january 2011 bought a van an insured it for work can I claim whole lot back in that years tax return as showing a loss as only traded 8 weeks
Cynthia - Friday, July 27th, 2012
What is the percentage of my house rent that i can justify in my expenses?Say if i pay 370 per month.
Ian - Friday, August 3rd, 2012
I spent £1750 having a website made for my business. Can I claim the whole cost in one year?
keith - Saturday, August 18th, 2012
i am a chauffeur can i claim for my suits
Martin Egan - Saturday, September 1st, 2012
What is the position on a coach deducting all cafe or food in London during coaching sessions if living 40 miles outside london?
email@example.com - Sunday, September 9th, 2012
Under UK tax rules, can a self-employed Optometrist claim tax relief as a business expense on university tuition fees to take a Masters Degree in Clinical Optometry, studying part-time?
re: julie hughes - Friday, October 26th, 2012
i pay for two of my children to go to university
can i claim any of the expenses back on my tax return, i pay for two lots of living exp on both properties
bob - Monday, October 29th, 2012
how much of the cost of tools can a self employed tradesman claim back?
mark - Wednesday, December 5th, 2012
i wish to pay my wife for a small amount of admin work that she does for me & claim this as an expense. I am self emplyed & earn under £8000 pa & the amonut due to her is approx £300 pa. How would she treat this income if I put it on my tax return as an expense
Drew - Wednesday, December 5th, 2012
I am self employed & on self assessment.I wish to claim, as an expense, for the small amount of admin that my wife does.How do I do this & does my wife need to put this on her tax return.
Steven Spencer - Thursday, December 27th, 2012
I am having to do driving lessons to expand my business (otherwise I would not bother as I use public transport and always have), am I able to claim back this driving lessons costs against my self assessment?
Gilly - Thursday, January 3rd, 2013
Hi, I’m just about to submit my first self employed tax return. However, I would like one question answered and that is, I know I can claim 40 p per mile tax year 2011-2012 for each work mile travelled, but does this include the cost of annual car tax, car mot, car repairs and car insurance?
I look forward to hearing from you!
Anthony Clegg - Monday, January 28th, 2013
How much of a car purchase can I claim back on tax.
marc - Tuesday, January 29th, 2013
I want to go self employed if I buy tools and van before registering as a sole trader can I still claim them as taxable expenses?
Howard Wright - Saturday, February 16th, 2013
My daughter’s husband is self employed and my daughter has always done his books. What can she legally claim before having to pay tax? She only gets child benefits at the moment.
Car - Wednesday, February 27th, 2013
I have started running a Training Company part time, I have to cart around a lot of things like projector screen computer and training equipment. I struggle fitting it into my saloon car and would like to buy an estate can I claim any tax on this purchase as I only need to buy it because of the equipment I need to transport
Graham Hall - Saturday, March 23rd, 2013
Hi, I am self employed and work worldwide.
Can I claim per-diem living away expenses while I am away.
I am currently away for about 200 days per year,
samuel - Monday, April 15th, 2013
can I add my car insurance, council tax and my wife tuition fees including my expenses during my tax returns
Nick - Wednesday, April 17th, 2013
My son wants to do a Personal Trainers course to top up his University Qualifications. The course costs £3500 and loans will add nearly double this to his already overburdened debt.
I am a self employed Electrical Draughtsman, if I paid his fees i.e. the £3500 can I claim anything back through my business?
Khadija - Tuesday, April 23rd, 2013
Hello, iv started a job where im self employed and we are given a fixed wage of 200 pounds a week plus bonuses if we make the sale. We work from 8am till 5pm. I catch three buses to get to the workplace. Do i get some help with my bus pass or anything like that? thank you
alex - Wednesday, April 24th, 2013
I bought a new car 2011 but I have used it all this tax year for work can I claim any money back for it?
Lorraine warren - Monday, May 20th, 2013
My parents rent a house out privately and pay tax on the rent they receive. What they claim back in tax ? For example the front garden wall fell down onto the path and they replaced it. Could they claim tax back ?