The rule HMRC applies for sole traders is deceptively simple: business expenses must be wholly and exclusively for the trade. Get that right and you can reduce your taxable profit — and your tax bill — significantly. Here's the 2025/26 checklist.
Office costs
- Stationery, printer ink, postage
- Phone, mobile and internet (business proportion)
- Business-related software subscriptions
- Small equipment (under the annual investment allowance)
Travel and vehicle costs
- Train, bus, taxi and flight fares for business trips
- Business mileage — see our HMRC mileage rates guide
- Hotel accommodation and reasonable meals when away overnight
- Parking, tolls and congestion charge (not parking fines)
Commuting from home to a regular workplace is not allowable.
Clothing
- Uniforms with a business logo
- Protective clothing (hi-vis, steel toe caps, safety helmets)
- Costumes for actors / entertainers
Regular clothes you could wear day-to-day aren't allowable — even if you genuinely only wear them for work.
Staff and subcontractor costs
- Employee salaries, benefits and pension contributions
- Employer's National Insurance
- Subcontractor payments (with CIS deductions where relevant)
- Agency fees
Stock and materials
- Raw materials
- Stock bought for resale
- Direct costs of producing goods
Marketing and professional fees
- Website hosting, domain and design
- Online and print advertising
- Accountant, solicitor, surveyor fees for the business
- Professional indemnity insurance
- Trade body / professional subscriptions on HMRC's approved list
Working from home
You have two options:
- Simplified expenses (flat rate): £10/month for 25–50 hours, £18/month for 51–100 hours, £26/month for 101+ hours.
- Actual costs: a fair proportion of rent/mortgage interest, council tax, utilities, and repairs based on rooms used and time worked.
Whichever route you pick, keep working notes showing how you arrived at the figure.
Bank, finance and interest
- Business bank account fees
- Interest on business loans and credit cards
- Leasing costs (with restrictions for cars with high emissions)
What you can't claim
- Personal expenses (client entertaining, own meals during a normal working day)
- Fines and penalties
- Your own salary as a sole trader (drawings are not an expense)
- Political donations
- Cost of a car itself if you're using the mileage rate
Keeping the evidence
For every expense above you need a receipt and — from April 2026 for anyone in MTD ITSA — a digital record. See our guide on digital receipts and HMRC record keeping for what actually counts.