Allowable Self-Employed Expenses 2026/27
Updated for the 2026/27tax year · Last updated
Use this reference guide to check whether a business expense is deductible against your self-employment profits for 2026/27. Search by keyword or browse by category — each item shows whether it is allowable, not deductible, or allowable only in part.
As a sole trader, you pay income tax and Class 4 National Insurance on your taxable profit — your gross income minus allowable business expenses. Every legitimate business expense you claim reduces your profit and therefore reduces both your income tax and your NI bill. A £1,000 allowable expense saves a basic-rate taxpayer £260 (20% income tax + 6% Class 4 NI). For a higher-rate taxpayer, the saving is £460 per £1,000 claimed. Maximising your allowable expense claims is one of the most direct ways to reduce your tax bill within the rules.
HMRC’s core test for allowable expenses is that they must be incurred “wholly and exclusively for the purposes of the trade.” This means the expense must have a genuine business purpose, with no private or personal element — or, where there is a dual purpose, only the business proportion may be claimed. HMRC applies this test with varying strictness across different expense categories: some (such as business mileage and professional subscriptions) are clearly defined; others (such as home office costs and phone bills) require a reasonable apportionment.
Common allowable categories include: business travel and mileage at HMRC’s approved rates; working-from-home costs (either flat-rate or apportioned actual costs); equipment purchased for business use under the Annual Investment Allowance; professional fees and subscriptions; business phone and broadband (business proportion only); software subscriptions; marketing and advertising; and accountancy fees. Client entertainment — despite feeling very business-like — is specifically disallowed by HMRC and cannot be claimed.
Reference guide for common self-employed business expenses. The “allowed” status assumes the expense is incurred wholly and exclusively for business purposes.
Office & equipment
| Computer, laptop, tabletBusiness use proportion only | |
| Software subscriptionsMust be wholly for business | |
| Office furnitureBusiness use proportion if at home | |
| Stationery & postageFully deductible | |
| Personal clothingNot deductible unless a specialist uniform |
Travel & vehicles
| HMRC mileage allowance (45p/25p)For cars using AMAP rates | |
| Train, bus, taxi faresBusiness journeys only | |
| Hotel & accommodationBusiness trips only | |
| Commuting to regular workplaceTravel to a permanent workplace is not deductible | |
| Subsistence (meals on business trips)Reasonable amounts while away from base |
Home working
| HMRC flat rate (£10–£26/month)Simplified expenses for self-employed | |
| Actual costs (heat, light, broadband)Business-use proportion only | |
| Mortgage interest / rentNot deductible for sole traders (use of home method instead) |
Professional & finance
| Accountancy & bookkeeping feesFully deductible | |
| Professional subscriptionsMust be on HMRC approved list | |
| Professional indemnity insuranceBusiness insurance is deductible | |
| Bank charges (business account)Business account fees only | |
| Personal income taxNot a business expense |
Marketing & training
| Advertising & marketingWholly for business promotion | |
| Website costs & hostingFully deductible | |
| Training to improve existing skillsMust relate to current trade | |
| Training to start a new tradePre-trading costs are capital, not revenue | |
| Business entertainingEntertaining clients is specifically disallowed |
People also looked at
How this calculator works
The checker categorises common business expenses against HMRC’s published guidance for sole traders in 2026/27. Each item shows one of three statuses:
Allowable: The expense is fully deductible against your self-employment profits provided it is incurred wholly and exclusively for your business. You should keep evidence (receipts, invoices, bank statements) for all claimed expenses — HMRC can request records up to five years after the filing deadline for the relevant year.
Allowable in part:The expense has a mixed business and personal element. Only the business proportion is deductible. For phone bills this is typically the business-use percentage of your monthly plan. For vehicle costs, it’s either the business mileage proportion or the HMRC flat mileage rate (whichever method you choose for that vehicle). You must be able to justify the proportion claimed if HMRC enquires.
Not deductible: HMRC does not allow this expense as a business deduction. Examples include client entertainment, personal expenses of any kind, the private-use portion of vehicle costs, clothing that could be worn outside work, and fines or penalties. Claiming non-allowable expenses is an error that HMRC may correct with interest and penalties if discovered.
For complex situations — particularly around capital allowances for equipment, partial business use of your home, or travel involving both business and private elements — HMRC’s guidance in the Business Income Manual (BIM) is the authoritative source, or consult a qualified accountant.