You can deduct allowable business expenses when working out your taxable profit. The cost must qualify under the rules, and you can only claim the business part of a mixed personal and business expense. A receipt proves what you bought; it does not automatically make the whole purchase allowable.

Start with the reason for the spending, then keep enough detail to explain it. A merchant's invoice, a record of the job and the payment together tell a more useful story than an unexplained bank transaction.

Start with the ordinary costs of the work

Common trade-business costs include materials, fixings, consumables, business insurance, subcontractor charges and eligible phone or software costs. HMRC's expenses guide sets out the categories and the distinction between business spending and personal use.

Your own drawings are not wages paid to an employee and do not reduce your sole-trader profit. Moving £500 from the business account to your personal account does not create a £500 expense.

If you use the £1,000 trading allowance against the trading income, you cannot also deduct actual expenses for that income. Check which approach applies before adding receipts to a claim. A small turnover does not mean both deductions are available together.

Illustrative example: a £50 monthly phone bill is supported by records showing 60% business use. The business share is £30. Use a reasonable basis you can explain; do not copy that percentage without checking your own use.

Check tools and equipment against your accounting method

Materials used on customer jobs and equipment kept for repeated use are not always treated in the same way. Under cash basis, eligible equipment purchases can generally be expenses. Under traditional accounting, equipment kept for the business may require capital allowances.

Cars and some other assets have separate rules. Before buying expensive equipment, check HMRC's equipment guidance and confirm the treatment with your accountant if needed. Do not assume that every large purchase must be spread over several years, or that every payment can be deducted immediately.

Choose a valid method for the vehicle

You may use eligible actual vehicle costs or simplified mileage, depending on the vehicle and earlier claims. For cars and goods vehicles in 2026/27, simplified mileage is 55p for the first 10,000 business miles and 25p thereafter. The motorcycle rate is 24p.

The flat rate replaces the vehicle costs it covers. Do not claim it and add the same fuel, insurance or repairs again. Earlier capital-allowance or purchase-cost claims can prevent using simplified mileage for that vehicle. See HMRC's vehicle rules.

Record the journey, business purpose and miles. Private journeys and ordinary commuting are not allowable business travel. Home-to-site journeys can need closer consideration; a van full of tools does not settle the question by itself. The mileage guide explains a practical record.

Separate protective clothing from everyday clothes

Protective clothing needed for the work and uniforms can qualify. Ordinary clothing does not become allowable just because you only wear it on site. HMRC states this distinction in its clothing guidance.

Keep the itemised receipt. “Workwear” written beside a bank payment is less useful than an invoice showing the protective boots or other equipment purchased.

Check training and professional fees carefully

Training can qualify when it supports the existing business, including updating technical knowledge or learning relevant business skills. Training to start a new business or move into an unrelated field is different. Check the course against HMRC's training guidance before assuming the fee is deductible.

Business accountancy and professional fees can qualify, but HMRC excludes the cost of preparing and submitting your personal Self Assessment return. Ask for mixed fees to be separated where necessary. The financial-cost guidance also distinguishes loan interest from repayment of the amount borrowed.

Make the records easy to check

1. Keep the receipt or invoice when the cost arises.

2. Add a short business purpose and any private-use split.

3. Match the record to the payment and remove duplicates.

4. Flag uncertain claims for review instead of quietly treating them as allowable.

TradePilot can hold expense and receipt records and manually entered mileage. It does not decide tax eligibility. HMRC normally requires self-employed records for at least five years after the relevant 31 January filing deadline; check the retention rules for exceptions.

Written by Chris, founder of TradePilot.

This is general information, not personal tax advice. Official guidance checked on 16 September 2026. Your accounting method and circumstances can change the treatment.