Expenses, and what you can actually claim
Every legitimate expense you claim comes straight off your taxable profit. Most trades under-claim - not because the rules are hard, but because the receipts are gone by January. Here's what counts, what doesn't, and how to keep more of what you earn.
THE SHORT VERSION
If you're self-employed, anything you spend wholly and exclusively for the business is an allowable expense - tools, materials, the van, fuel, insurance, your phone. It comes off your profit before tax is worked out, so a basic-rate trade saves roughly 26p per pound claimed. The only rule that bites: you need a record of it.
WHAT COUNTS AS AN ALLOWABLE EXPENSE?
HMRC's test is one phrase: the cost has to be wholly and exclusively for the business. Not "mostly", not "it helps" - the spend itself has to be a business spend.
That sounds strict but it's broader than most people think. Three things worth knowing:
- check_circleMixed-use costs can be split - claim the business share of your phone bill or home broadband
- check_circleBig kit counts too - vans, machinery and expensive tools are claimed through capital allowances, usually 100% in the year you buy
- check_circleNo receipt isn't automatically no claim - a bank statement line is evidence - but you need something, kept as you go
The expense comes off your turnover before your tax and National Insurance are calculated. Miss it off the return and you're taxed on money you never kept.
WHAT A CLAIM IS ACTUALLY WORTH
A £100 trip to Screwfix, claimed properly, at the basic rate (26%).
On the business - materials, fixings, a new drill. Wholly and exclusively, so it's allowable.
The full amount comes off your taxable profit before HMRC works out what you owe.
The 20% tax and 6% National Insurance you'd otherwise have paid on that profit stays in your pocket.
What that spend really cost you once it's claimed. Lose the receipt and don't claim it, and the full £100 is yours to swallow.
WHAT TRADES CAN CLAIM
The categories that make up almost every tradesperson's return.
Tools & equipment
Hand tools, power tools, ladders, kit. Big-ticket items like machinery go through capital allowances - usually 100% in the year you buy.
Materials & consumables
Everything bought for jobs - timber, fixings, cable, paint, sealant - plus what it costs to get it there.
The van & travel
Mileage at HMRC rates or actual running costs - fuel, insurance, MOT, repairs. Plus parking and tolls on jobs.
Workwear & PPE
Hi-vis, steel toe caps, gloves, goggles, helmets, and branded workwear. Uniform yes, everyday clothes no.
Insurance & subscriptions
Public liability, tool cover, van insurance, trade body memberships and certifications like Gas Safe or NICEIC.
Phone & admin
The business share of your phone and broadband, accounting software, bank charges on a business account.
Subcontractors & labour
What you pay subbies and casual labour on your jobs - including CIS deductions you've made as a contractor.
Working from home
Doing quotes and books at the kitchen table counts. Claim HMRC's flat rate or a share of household bills.
The van: two ways to claim, pick one
Mileage rate: 55p a mile for the first 10,000 business miles each year, 25p after that. Covers fuel, insurance, repairs and the vehicle itself - no receipts needed, just a mileage log.
Actual costs: claim the real running costs - fuel, insurance, MOT, repairs, and capital allowances on the van - minus any private use share.
Once you've used the mileage rate on a vehicle you stick with it for that vehicle's life. High-mileage trades usually win on the mileage rate; big diesel bills and a dear van usually win on actual costs. Work it out both ways in year one.
WHAT YOU CAN'T CLAIM
The lines HMRC actually holds, and where people get caught:
- cancelOrdinary clothes - jeans and boots you could wear anywhere aren't claimable, even if you only wear them on site. Branded workwear, hi-vis and safety gear are.
- cancelEveryday lunches - feeding yourself is living, not trading. Meals only count on genuine overnight stays or irregular travel outside your normal pattern.
- cancelTravel to a regular workplace - driving between jobs and to suppliers counts; a daily commute to the same yard or site for months doesn't.
- cancelFines and penalties - parking tickets and speeding fines are never allowable, even picked up on a job.
- cancelEntertaining customers - taking a client for a pint or a meal is specifically disallowed, however good it is for business.
The expensive habit: claiming from memory
Most under-claiming isn't about the rules - it's January reconstruction. A year of cash Screwfix runs, fuel top-ups and parking can't be rebuilt from memory, so it quietly falls off the return. At 26p saved per pound, £2,000 of forgotten expenses is over £500 handed to HMRC. Records kept as you go are also about to be the law for many trades anyway, under Making Tax Digital.
HOW BOSH CATCHES EVERY EXPENSE
The claim is only as good as the records. Bosh keeps them without you thinking about it.
1. Connect your bank
Link your account with Open Banking and every payment and purchase lands in Bosh automatically. Read-only - we can't move your money.
2. Categorised as you spend
Screwfix, Toolstation, fuel, insurance - every transaction sorted into the right HMRC category the moment it happens. Nothing waits for January, nothing gets forgotten.
3. Claim the lot
When it's time to file, every allowable expense is already on the return. Watch your tax bill drop through the year as the claims stack up - not as a January guess.
From £3.99 a month. Cancel any time.
EXPENSES QUESTIONS
The things people actually ask us about expenses.
What expenses can I claim if I'm self-employed?
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Anything spent wholly and exclusively for the business: tools, materials, van and travel costs, workwear and PPE, insurance, phone and broadband share, software, subcontractor payments, and a working-from-home allowance. It all comes off your profit before tax is calculated.
Can I claim for my van?
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Yes, one of two ways. Either HMRC's mileage rate - 55p a mile for the first 10,000 business miles, 25p after - or the actual running costs plus capital allowances on the vehicle, minus private use. Once you use the mileage rate on a vehicle you stick with it for that vehicle.
Can I claim for food on jobs?
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Usually not. Day-to-day lunches aren't allowable - HMRC's view is you'd have to eat anyway. Meals count when you're staying away overnight for work, or on genuinely irregular travel outside your normal pattern.
Can I claim for work clothes?
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Safety gear and branded workwear, yes - hi-vis, steel toe caps, gloves, overalls with your name on. Ordinary clothes, no, even if you only ever wear them on site. The test is whether it's protective or uniform, not where you wear it.
Do I need receipts for everything?
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You need a record, which isn't always a paper receipt - a bank or card statement line is evidence. Cash purchases are the danger zone: no record, no claim. Whatever form it takes, it needs keeping for at least five years after the 31 January filing deadline for that tax year.
Can I claim expenses without paying tax on them first?
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Expenses aren't a refund scheme - they reduce the profit you're taxed on. Spend £100 on the business and your taxable profit drops £100, saving you the tax and National Insurance you'd have paid on it - around 26% at basic rate.
What is the trading allowance?
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A flat £1,000 you can deduct instead of claiming actual expenses. It only makes sense if your real costs are under £1,000 a year - for a working trade with a van, they almost never are. Claim actual expenses instead.
Can I claim for tools I bought before going self-employed?
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Often, yes. Kit you already owned and brought into the business can be claimed at its market value when you started trading. Purchases made specifically to set up - tools, a van - are typically treated as day-one expenses.
Can I claim training courses?
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Refreshing or updating skills you already use in the trade, yes - renewals, safety tickets, keeping certifications current. Training for a brand-new trade is treated differently and generally isn't allowable for sole traders.
What happens if I claim something I shouldn't?
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If HMRC checks your return and disallows an expense, you pay the extra tax plus interest, and a penalty if they think you were careless. Honest mistakes get lighter treatment than made-up numbers - which is another reason real records beat January guesswork.
Stop paying tax on money you spent
Bosh captures every expense as it happens, so nothing falls off your return. Tax sorted. Job done.
Get started freeThis guide is general information about self-employed expenses, not tax advice for your particular situation. Rules and rates are as published by HMRC. For the official detail see GOV.UK.