# Allowable expenses if you are self-employed

Canonical: https://taxmo.co.uk/self-assessment-guide/allowable-expenses
Part of: [Self Assessment topics](https://taxmo.co.uk/self-assessment-guide)

Allowable expenses are the running costs of your business that you deduct to work out your taxable profit. GOV.UK says you can only claim for costs related to business purchases, and money you take out of the business for personal use is not an allowable expense.

## The categories GOV.UK lists

- Office costs, such as stationery and phone bills
- Travel costs, such as fuel, parking and train or bus fares
- Clothing expenses, such as uniforms
- Staff costs, such as salaries or subcontractor costs
- Things you buy to sell on, such as stock
- Financial costs, such as insurance or bank charges
- Costs of your business premises, such as utilities and business rates
- Advertising or marketing, such as website costs
- Trade or professional journals and subscriptions
- Training courses related to your business, such as refresher courses

## Costs you use for business and personal use

You can only claim the business part. If a phone bill covers business and personal calls, you claim the share that was business. If you work from home, GOV.UK says you need a reasonable way of dividing your costs, for example by the number of rooms you use for business or the time you spend working from home.

## Equipment, vehicles and capital allowances

If you use traditional accounting, you claim capital allowances when you buy equipment, machinery or business vehicles. If you use cash basis, you claim capital allowances only on a business car, and other items you buy and keep for the business are claimed as allowable expenses in the normal way.

## Simplified expenses

Simplified expenses are flat rates you can use instead of working out actual costs, for some vehicles, working from home and living in your business premises. All other expenses are worked out from actual costs. Sole traders can use them, limited companies cannot. The current flat rates are on GOV.UK.

## The trading allowance instead

If you use the trading allowance you cannot claim allowable expenses or capital allowances as well. It is one or the other.

## Common mistakes

- Claiming the whole of a cost you also use personally.
- Treating money you took out for yourself as a business expense.
- Claiming expenses and the trading allowance for the same income.
- Claiming a cost that was for a limited company you own. A company deducts its costs for Corporation Tax, not on your Self Assessment.

## Sources

- [GOV.UK, Expenses if you're self-employed](https://www.gov.uk/expenses-if-youre-self-employed)
- [GOV.UK, Simplified expenses if you're self-employed](https://www.gov.uk/simpler-income-tax-simplified-expenses)

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Checked against GOV.UK on 6 November 2026. Rules and figures change, so verify on GOV.UK before you rely on this. General information, not tax advice.