Can I Claim This Expense? Self-Employed Guide
Quick Answer
You can claim a cost if it was incurred wholly and exclusively for your business. If there's meaningful personal benefit mixed in, you can usually only claim the business-use proportion — or nothing at all if the personal element can't be separated out.
The "Wholly and Exclusively" Test
This is HMRC's core test for allowable expenses. Ask: would I have incurred this cost if I wasn't running my business? If the answer is no, and the cost has no significant personal benefit, it's likely allowable. If it serves a dual purpose (business and personal), you generally need to apportion it.
Commonly Allowed Expenses
- Office costs — stationery, phone bills, software subscriptions
- Travel costs — fuel, parking, train or bus fares for business journeys
- A proportion of home-working costs (heating, electricity, internet)
- Equipment and tools used for your business
- Marketing and website costs
- Professional fees — accountant, insurance, subscriptions to trade bodies
- Training courses directly related to your existing business
Commonly Disallowed Expenses
- Client entertaining — meals, drinks or events for clients or suppliers
- Everyday clothing, even if it's smart business attire
- Fines and penalties
- Costs before you started trading that weren't genuinely pre-trading business costs
- Personal expenses with no business purpose
Grey Areas
Training: a course to maintain or improve skills in your existing business is usually allowable; training for a brand-new skill or business area often isn't, since HMRC treats that as a capital cost of starting something new.
Vehicles: if you use your car for both business and personal journeys, you can only claim the business-use proportion — either by tracking actual costs and mileage, or using simplified mileage rates.
Equipment used partly for personal use: claim the business-use percentage only, based on a reasonable estimate you can justify if HMRC asks.
Simplified Expenses
Instead of tracking exact costs, you can use HMRC's flat rates for working from home (based on hours worked per month) and business mileage (45p per mile for the first 10,000 miles, 25p per mile after that, for cars). These are optional and can save time, though they don't always produce the highest possible claim.