Allowable expenses reduce taxable profit, but they need to be genuine business costs and supported by records. The aim is to claim what you are entitled to, not guess at year end.
What allowable means
An allowable expense is usually a cost incurred wholly and exclusively for the business. Some mixed-use costs need a fair business proportion.
- Business purpose
- Evidence kept
- Private use adjusted where needed
Common sole trader expenses
Typical costs include materials, tools, software, insurance, travel, phone, internet, office costs and professional fees.
- Supplier invoices
- Software subscriptions
- Business insurance and memberships
Home working costs
If you work from home, you may be able to claim simplified expenses or a reasonable proportion of actual household costs.
- Keep calculation notes
- Use a consistent method
- Do not claim private use
Travel and mileage
Business travel can be allowable, but ordinary commuting is treated differently. Keep journey records.
- Mileage log
- Parking and train receipts
- Business reason for travel
Record keeping
Expenses are easier to claim when receipts are captured throughout the year.
- Upload receipts monthly
- Use separate business bank account
- Review costs before filing
Key takeaway
Claiming expenses confidently depends on good records and a sensible business reason for each cost.
