If you’re a UK sole trader, knowing what expenses you can claim can make a huge difference to your tax bill. Claim too little and you overpay tax. Claim the wrong things and you risk problems with HM Revenue & Customs.

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So let’s break it down clearly — what you should claim, what you could claim, and what you absolutely shouldn’t.

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Claiming expenses - The Golden Rule: “Wholly and Exclusively”

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HMRC’s rule is simple in theory: You can claim expenses that are wholly and exclusively for business purposes.

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In reality, many expenses sit in a grey area — especially if you work from home or use personal assets for business.

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Expenses You Should Be Claiming (The Obvious Ones)

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These are the basics that almost every sole trader should be claiming:

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1. Office & Running Costs

• Stationery

• Printer ink

• Postage

• Software subscriptions (Xero, Microsoft, Adobe, etc.)

• Phone and broadband (business portion only)

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If you use your phone or internet personally, you can only claim the business percentage.

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2. Travel Costs (Business Only)

• Mileage (using HMRC’s approved mileage rates)

• Train, bus, taxi fares

• Parking fees

• Hotel stays for business trips

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You cannot claim normal commuting to a permanent place of work.

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3. Professional Fees

• Accountant or bookkeeper fees

• Legal advice

• Business consultancy

• Professional memberships linked to your trade

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This is one area people often underclaim — and it’s fully allowable.

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4. Marketing & Advertising

• Website hosting and domain costs

• Google Ads, Facebook Ads

• Logo and branding design

• Business cards and flyers

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If it helps generate income, it’s usually deductible.

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Expenses You Could Be Claiming (Often Missed)

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This is where things get interesting.

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5. Working From Home

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If you work from home, you may be able to claim:

• A portion of rent or mortgage interest

• Council tax

• Electricity and gas

• Water

• Home insurance

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This can be done:

• Using HMRC’s flat rate, or

• Using actual costs, apportioned by room and usage

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The right method depends on your setup — and can materially impact your tax.

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6. Use of Personal Assets

You may be able to claim:

• Capital allowances on equipment

• Business use of your personal vehicle

• Depreciation-style relief on tools or machinery

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This is highly situation-dependent — and often overlooked.

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7. Clothing (Yes… Sometimes)

You cannot claim everyday clothing.

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But you can claim:

• Branded uniforms

• Protective clothing (PPE)

• Trade-specific attire (e.g. safety boots, overalls)

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If you could reasonably wear it outside of work, HMRC will likely disallow it.

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8. Training & Education

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Allowable:

• Courses to maintain or improve existing skills

• CPD linked directly to your trade

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Not allowable:

• Training that creates a new trade or skillset

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This distinction matters more than people realise.

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Expenses You Shouldn’t Claim (Common Traps)

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Avoid claiming:

• Personal groceries or meals at home

• Family expenses

• Holidays with “some business emails”

• Normal commuting costs

• Client entertainment (not tax-deductible in the UK)

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These are classic HMRC enquiry triggers.

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Flat Rate vs Actual Expenses – Which Is Better?

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Some sole traders can use simplified expenses (flat rates for home working or vehicles). Others are better off claiming actual costs.

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There is no universal answer — and choosing the wrong option can cost you money every year.

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The Bottom Line

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If you’re a sole trader:

• You should be claiming everything you’re entitled to

• You shouldn’t be guessing

• And you definitely shouldn’t be copying what “someone on Facebook” does

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The right expense strategy can legally save you thousands over time — but only if it’s done properly.

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Need Help Getting It Right?

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At Xenith, we work with sole traders across the UK to:

• Maximise legitimate tax relief

• Stay compliant

• Avoid nasty surprises from HMRC

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If you’re unsure whether you’re claiming too little — or too much — it’s probably time for a proper review.

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Smart tax planning isn’t about pushing boundaries. It’s about understanding them. Contact us for assistance!

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