What Expenses Can I Claim as a Sole Trader?

Many self-employed people either aren't claiming all the expenses they're entitled to, or feel uncertain about the ones they do claim. That's perfectly understandable. When you start out, very few people are given clear guidance, and it often feels as though you're working it out as you go.

The good news is that the rules are less complicated than they appear, once you understand the underlying principles.

This guide will explain what you can claim as an expense, what to be cautious of, and how to keep records in good order without it becoming a significant burden.

The Rule That Decides Everything

The single most important principle behind almost every expense is this: it must be wholly and exclusively for the purposes of your business.

Put more simply: if your business didn't exist, would you have bought it?

If the answer is no, you can most likely claim it.

If something serves both work and personal use, you'll either be unable to claim it at all or only able to claim the proportion that relates to business use.

Keep this principle in mind throughout. It will make every other decision considerably easier.

Everyday Business Costs You Can Usually Claim

Running Your Day-to-Day Work

Every business has essential running costs, including office space (if you have one), electricity, and other utilities. You'll also need stationery, printer supplies, and general office consumables. None of these seem significant in isolation, but they add up to a meaningful sum across the year.

Getting to Work (Travel Costs)

Travel is one of the areas that causes the most confusion.

You can generally claim fuel, public transport, and parking. The important distinction is this: business travel is deductible, but your daily commute to and from your usual place of work is not. Driving to a client's office is claimable; driving to your own office every morning is not.

Tools, Equipment & Software

Anything you use to carry out your work is typically allowable, including laptops, phones, and any specialist tools or equipment. The same applies to software you subscribe to, such as accounting or design packages. If you use something for both work and personal purposes, claim only the proportion that relates to business; a reasonable estimate is sufficient.

Promoting Your Business

The cost of attracting clients is generally allowable. This includes your website, advertising, and any branding or design work. It can be tempting to view these as optional extras, but they are a direct investment in the growth of your business.

Professional Support

You aren't expected to manage every aspect of your business alone. Fees for accountants, solicitors, and consultants are all claimable. In many cases, the right professional support will save you more than it costs, particularly if it helps you set things up correctly from the outset.

Insurance

Business insurance premiums are generally allowable. This includes public liability and professional indemnity cover, both of which are straightforward but important to have in place.

Working From Home: What Can You Realistically Claim?

If you work from home, you can claim a proportion of your household bills, including electricity, heating, and internet. There are two main approaches: a simple flat-rate allowance, or a calculation based on the actual proportion of bills attributable to business use.

Don't get too caught up in which is "best." Choose a reasonable method and apply it consistently.

The Expenses That Catch People Out

Most of the confusion around expenses comes down to knowing what is and isn't allowable.

Common grey areas include personal items (not claimable), items used for both work and personal purposes (only the business portion is claimable), and client entertainment (typically not claimable).

The aim isn't pinpoint accuracy; it's an honest reflection of what is genuinely for the business.

Why Claiming Expenses Properly Makes a Real Difference

This isn't simply an administrative exercise; it has a direct impact on your business.

Claiming expenses correctly reduces your taxable profit, ensures you don't overpay tax, and gives you a clearer view of your true financial position. Many self-employed people focus on revenue but pay less attention to what they actually take home, and expenses play a significant role in that figure.

Keeping Track Without Making It Complicated

Record-keeping shouldn't be stressful; it should be manageable.

The key is little and often: record expenses as they occur, use a simple system to keep things organised (whether that's an app, a spreadsheet, or dedicated software), and file receipts as soon as possible.

Managing your finances in small, regular steps is far easier than trying to reconstruct an entire year at the deadline.

Where Sole Traders Usually Go Wrong

The same patterns come up time and again: forgetting to record small expenses, mixing business and personal funds in the same account, estimating figures rather than recording them properly, and leaving the Self Assessment return until the last possible moment.

These are common habits, but addressing them early pays significant dividends later. Getting this right from the start will save you both time and money.

Get the Basics Right and the Savings Follow

You don't need to know every tax rule or memorise every category of allowable expense.

What matters is having a straightforward system, building consistent habits, and understanding the core principles.

If you're unsure whether you're claiming everything you're entitled to, Brookwood can help you organise your expenses and ensure you aren't paying more tax than necessary. A second pair of eyes, or a little extra clarity, can make a meaningful difference, both in time saved and in money kept.