Can I claim expenses for a business I run part-time?

Understanding what “part-time business” really means

Running a business part-time is increasingly common. You might sell products online in the evenings, do weekend consultancy work, drive for a delivery platform after your day job, or run a small creative practice alongside employment or caring responsibilities. A part-time schedule doesn’t make your business “less of a business” for tax purposes. What matters is whether you’re carrying on an actual trade (or business activity) with the intention of making profits, and whether the expenses you want to claim are genuinely connected to that activity.

In practical terms, the right to claim expenses is not based on the number of hours you work. It’s based on whether the costs are incurred “wholly and exclusively” for business purposes (or the equivalent principle in your jurisdiction), whether you keep adequate records, and whether you account for any private element properly. A part-time business can often have the same categories of expenses as a full-time one: tools and equipment, software, travel, marketing, insurance, professional fees, bank charges, and the cost of goods you sell. The difference is usually about scale, and about the need to apportion shared costs more carefully because your personal life and your employment may overlap more with the business.

Why you can usually claim expenses even if the business is small

Small or part-time businesses generally face two common worries: “Is my activity too small to count?” and “Will claiming expenses trigger problems?” In most systems, if you are genuinely trading or operating a business activity, you can claim allowable expenses. It’s normal for a new business to have low revenue and still have legitimate costs. It’s also normal to have expenses before you earn consistent income, particularly if you need equipment, professional training, or marketing to get started.

What matters is that you can show the business is real. That usually means you are offering goods or services to customers, charging for them, maintaining accounts, and behaving like a commercial operation rather than a hobby. A small business that makes a profit sometimes is not automatically a hobby. Likewise, a hobby that occasionally brings in money is not automatically a business. The line can be fuzzy, but your intent, behavior, and evidence help clarify it.

The golden rule: business expenses must be for business

The core idea behind allowable expenses is simple: you can generally deduct costs that are necessary for, and directly related to, earning your business income. The trick is that many expenses in a part-time business sit in the “mixed use” category, meaning they are partly personal and partly business. For example:

• Your mobile phone might be used for business calls and personal messages.

• Your home internet might support business video calls as well as entertainment streaming.

• Your car might be used to visit clients and to do the weekly shop.

• Your laptop might be used for invoicing and also for personal browsing.

In those situations, you typically claim only the business portion. That often requires a reasonable method of apportionment and some form of supporting evidence. The key is to avoid claiming personal spending as if it were business spending, and to be consistent and sensible in how you split costs.

Common expense categories for part-time businesses

1) Cost of goods sold and materials

If you sell physical items, you can usually claim the cost of stock, raw materials, packaging, and shipping supplies that you use to produce or deliver those items. For example, a part-time candle maker may claim wax, fragrance oils, jars, labels, and postage boxes. A part-time reseller may claim the purchase price of items bought for resale. A part-time craft seller may claim materials and components.

Good recordkeeping matters here because it’s easy for stock and personal purchases to blur together. It helps to keep supplier invoices, receipts, and ideally a basic inventory or at least a list of purchases that are clearly for business. If you sometimes buy materials for personal projects as well, consider separating those orders or paying from separate accounts to avoid confusion.

2) Office supplies and consumables

Even a small part-time business can have routine running costs: printer paper, ink, stationery, postage, notebooks, and small consumables. These are usually straightforward as long as you can show they are used for the business. If you buy a pack of pens and use some personally, you may need to apportion, but for minor items many tax systems tolerate a practical approach provided it is reasonable and not abusive.

3) Software subscriptions and digital tools

Part-time businesses often rely heavily on low-cost software: bookkeeping subscriptions, invoicing tools, design software, cloud storage, website hosting, domain names, email services, scheduling tools, and project management platforms. These costs are typically claimable if they are used for business. If you subscribe to software that is also used personally—such as a general cloud storage plan—consider either upgrading to a separate business plan or calculating a business-use percentage and claiming that portion.

4) Advertising and marketing

Marketing costs are a classic allowable expense. This can include paid ads, social media promotions, business cards, flyers, banners for events, brand design fees, photography for product listings, and marketplace listing fees. For a part-time business, the temptation is to blur personal and business branding—especially if you are building a personal brand as well. As a rule, you want marketing spending to have a clear commercial purpose: attracting customers, generating leads, supporting sales, or maintaining your business presence.

5) Professional fees and services

Accountancy fees, bookkeeping services, legal advice, business coaching specifically related to running your business, and fees paid to contractors can often be claimed. Many part-time business owners eventually hire help for tasks like logo design, website setup, copywriting, or admin. Keep invoices and clear descriptions of the work done. If you pay someone you know personally, keep it professional: a written agreement, an invoice, and payment records can help show it is a genuine business transaction.

6) Business insurance

Insurance is frequently overlooked in part-time businesses, but it can be important and often claimable. Examples include professional indemnity insurance, public liability insurance (especially if you see clients in person or attend markets), product liability insurance, and insurance on business equipment. If an insurance policy covers both personal and business risks, you may need to apportion or consider getting a business-specific policy.

7) Bank charges, payment processing fees, and platform fees

If you accept payments through card processors or online platforms, the fees can usually be treated as business expenses. The same applies to business bank account fees, transaction charges, and marketplace commissions. These are easy to justify because they are directly tied to receiving income. If you use a personal account for business activity, it becomes harder to separate the fees—another reason many part-time business owners choose a separate bank account even before it is legally required.

8) Travel and mileage

Travel can be claimable if the travel is for business purposes: visiting clients, attending a supplier meeting, going to a trade show, delivering goods, or traveling to a temporary work site. Many part-time businesses involve travel, especially if you provide services locally.

For vehicle use, there are often two common approaches: claiming actual costs (fuel, insurance, maintenance, depreciation/lease costs) apportioned for business use, or claiming a mileage allowance based on business miles traveled. Which method is best depends on your jurisdiction and your situation. The important part is to keep a log of business journeys: date, destination, purpose, and distance. The more your car is also used personally, the more important accurate records become.

Public transport, taxis, parking, tolls, and travel accommodation can also be claimable where they relate to business activity. However, commuting to a regular place of employment is usually not a business expense for your part-time business, and travel that is mixed with personal trips needs careful treatment.

9) Training and education

Training can be one of the most confusing expense categories because it depends on the purpose of the training. Generally, training that maintains or improves skills you already use in your current business may be allowable. Training that gives you an entirely new skill or qualification that opens a new line of business is often treated differently. For example, a part-time graphic designer may be able to claim a course on advanced design techniques or software updates, whereas training for a completely new profession might not be treated as a direct business expense.

When in doubt, ask yourself: does this training help you do your existing business work better, or is it preparing you to start a different business? The more closely the course content ties to current income-generating activities, the stronger the case for it being a business expense.

10) Equipment, tools, and “capital” items

Part-time businesses frequently need equipment: a laptop, camera, power tools, specialist machinery, office furniture, or studio equipment. In many systems, equipment is treated as a capital expense rather than a day-to-day operating expense. That means you might not deduct the full cost in one go, depending on the rules that apply. There may be allowances to deduct the cost over time, or simplified schemes that let you claim the whole amount in the year of purchase up to certain limits.

For a part-time business, the key issues are (1) whether the item is mainly for business, and (2) whether it is a capital purchase. If you buy a laptop and use it 60% for business and 40% personally, you typically only claim the business portion. Keep evidence of the purchase and be prepared to explain the business need.

Home-based business expenses: what you can claim when you work from home

Many part-time businesses are run from home because it’s flexible and low-cost. Homeworking expenses can be claimable, but they are also one of the most common areas for mistakes.

Typical homeworking costs that may be apportioned

Depending on your setup and local rules, you may be able to claim a portion of costs such as:

• Rent (in some situations)

• Mortgage interest (not capital repayments, where applicable)

• Council/property taxes or local equivalent (sometimes)

• Utilities: electricity, gas, water

• Home internet and phone line

• Home insurance (sometimes, if it covers business use)

• Repairs and maintenance (if they relate to the workspace)

Part-time businesses usually need to split these costs between business and personal use. A common approach is to apportion based on time and space. For example, if you use one room as an office for 2 hours per evening, 5 days per week, you can estimate a reasonable percentage of household running costs attributable to the business. The method should reflect reality and be applied consistently.

Simplified homeworking methods

Some jurisdictions allow simplified flat-rate homeworking deductions rather than calculating exact proportions of household expenses. This can be attractive for part-time businesses because it reduces paperwork. However, a flat rate can be lower than what you might legitimately claim using detailed apportionment, especially if you have significant household costs and use a dedicated workspace. The best method depends on your numbers and the administrative burden you’re willing to handle.

Be careful with “exclusive use” and long-term implications

A frequent concern is whether claiming homeworking expenses affects future tax treatment of your home (for example, when selling). The rules vary by jurisdiction, but a general principle is that designating part of your home as exclusively used for business can have knock-on consequences. Many part-time business owners avoid claiming costs in a way that suggests a room is solely and permanently used for business, especially if the same room is also used personally (for example, a dining table used for packing orders in the evening). The safer approach is usually to claim a proportion that reflects mixed use.

This doesn’t mean you can’t claim homeworking expenses. It means you should keep the claim reasonable, based on actual business use, and avoid presenting personal living space as if it were fully commercial premises.

Mixed-use expenses: how to split them fairly

Mixed-use expenses are common in part-time businesses because you’re often using the same resources for work, life, and business. Here are practical ways to apportion common mixed-use costs:

Phone bills

If you have itemized billing, you can measure business call time or count business calls as a percentage. If you don’t, you can estimate based on business usage over a representative period (for example, three months) and apply that ratio. Some owners choose to get a separate business SIM or number to make the split clean.

Internet

Internet can be apportioned based on estimated business use. If multiple people use the household internet heavily, a strict “hours of use” method can be complicated. A reasonable approach might be to claim a portion that reflects your business usage, especially if the business relies on internet access for sales, communication, or delivery systems.

Vehicle expenses

Vehicle costs can be split based on business mileage versus total mileage. Keep a mileage log and retain receipts for major running costs if you’re claiming actual expenses. If you use a mileage allowance scheme, the log of business miles is crucial.

Computer and equipment

For a laptop used personally and for business, you can estimate business use as a percentage. If you have separate user accounts or primarily use the device during business hours for business tasks, that supports your percentage. For equipment like cameras or tools that are sometimes used personally, keep a record of business projects where the equipment was needed.

Subscriptions and memberships

If a subscription is partly personal (for example, a cloud storage plan used for family photos and business files), consider splitting based on storage used for business, or switch to separate accounts. Where a membership is primarily for networking or business development, keep evidence of how it supports your business activity.

Expenses you usually cannot claim (or need to treat with caution)

Part-time business owners often get tripped up by costs that feel business-related but don’t qualify. These categories should be approached carefully:

Ordinary clothing

In many tax systems, everyday clothing is not deductible even if you wear it while working. Clothing is usually only allowable if it is genuinely protective or a uniform that is not suitable for everyday wear. Branded uniforms can sometimes be deductible, but fashion purchases are usually not.

Personal meals

Your normal meals are typically personal. Business meals can be deductible in some cases if you are traveling for business or entertaining clients, but the rules can be strict and vary widely. If your “business meal” is just lunch at home while you do admin, that is usually personal.

Commuting

Commuting to your regular employment is not a business expense of your part-time business. If you travel from your home office to a client site, that may be a business journey. If you go from your employment to a client meeting, it might be deductible depending on the rules, but you need to distinguish “commuting” from “business travel.”

Family costs and dual-purpose spending

Costs that have a strong personal motive are risky. Examples include family holidays where you “also did some business,” home renovations that increase your personal comfort, and general lifestyle spending dressed up as marketing. If there is a significant private purpose, many systems disallow the cost entirely rather than allowing a split, unless you can clearly separate the business part.

Client gifts and entertainment

These often have special rules. Small promotional items may be treated differently from entertainment. If you give gifts, keep records of who received them and why. Avoid excessive or lavish spending that doesn’t match the size and nature of your business.

Start-up costs: can you claim expenses before you start trading?

Many part-time businesses begin gradually. You might buy a domain name, pay for a logo, purchase equipment, or pay for training before you make your first sale. In many places, certain pre-trading or start-up costs can be claimed once the business starts, provided they were incurred for the purpose of the business and within specific time limits or rules. The exact treatment depends on local tax law, but the general concept is that legitimate set-up costs aren’t automatically lost just because they happen early.

The practical takeaway is to keep all receipts from the moment you start preparing to trade, even if you haven’t registered yet or haven’t made revenue. Clear notes about the purpose of the spending can help later, especially if the expense could be seen as personal without context.

Recordkeeping: the part-time owner’s best defense

Because you’re running the business alongside other commitments, recordkeeping can easily slip. But good records are what make expense claims safe and stress-free. You don’t need a complicated system, but you do need consistency.

What to keep

• Receipts and invoices for purchases

• Bank and card statements

• Mileage logs for business travel

• Contracts or agreements with clients and suppliers

• Proof of payment (especially for cash transactions)

• Notes explaining business purpose where it’s not obvious

Digital records are often acceptable, and scanning receipts is a great habit because thermal receipts fade. A simple cloud folder structure by month and category can work. If you use bookkeeping software, attach receipts to transactions as you go. The easier you make it, the more likely you are to maintain it.

Separate finances: a simple step that makes everything easier

Even if you are not required to have a separate business bank account, it can be one of the best practical moves. It makes it far easier to identify business income and expenses, reduces the risk of missing deductions, and helps you prove that the activity is being run commercially. The same logic applies to a separate card used only for business. If you keep finances mixed, you’ll spend far more time at tax time trying to sort transactions, and you may be more cautious than necessary because you can’t clearly evidence what was business.

How expenses affect profit, and why that matters for part-time businesses

Expenses reduce your taxable profit, not necessarily your tax bill pound-for-pound. If your business earns 5,000 and has 2,000 of allowable expenses, your profit is 3,000. Your tax is then calculated on the profit (and combined with other income, depending on how your system works). This matters because part-time business owners often assume that claiming expenses is “getting money back.” Sometimes it is, but technically it is reducing the profit you are taxed on.

This distinction helps you make better decisions. If you don’t need an expense, buying it just to “save tax” rarely makes sense because you’re still spending cash. But if you genuinely need equipment, tools, marketing, or professional help, claiming those costs ensures you’re taxed on the true economic profit rather than a fictional number that ignores what it cost you to earn the income.

Part-time business + employment: special considerations

If you have a day job, your overall tax position might be different than a full-time self-employed person. Your employment income may already use up tax-free allowances or lower tax bands. As a result, additional business profit might be taxed at a higher rate. That doesn’t change whether you can claim expenses, but it can change how valuable those deductions are.

Also, if you use assets provided by your employer (like a company laptop or phone) for your personal business, that can create complications. Some employers prohibit it, and in some cases there can be benefit or compliance issues. If you run a part-time business, it’s usually better to keep the business infrastructure separate: your own laptop, your own phone line, your own tools. Even when you’re allowed to use employer resources, it can blur boundaries and weaken your evidence if you are ever asked to justify expenses.

Losses: what if your part-time business doesn’t make a profit yet?

It’s common for part-time businesses to make a loss in the early stages, especially if you invest in equipment, setup, and marketing before income ramps up. In many tax systems, trading losses can sometimes be used to offset other income, carried forward to future profits, or treated under specific rules. The availability and limits vary widely, and there may be additional scrutiny if a business repeatedly makes losses without signs of turning profitable.

The main point is that claiming legitimate expenses that create a loss is not automatically “wrong.” But you should be able to show that the business is run commercially and with a profit motive. If you consistently claim losses year after year, it’s wise to keep evidence of your efforts to improve profitability: marketing plans, pricing changes, increased sales activity, or expansion of services. That helps demonstrate the activity is a business and not primarily a hobby.

Examples: how expense claims might look for real part-time businesses

Example 1: Weekend personal trainer

A personal trainer who works weekends might claim: liability insurance, gym rental fees, equipment used for sessions, a portion of phone costs for scheduling clients, marketing and website costs, accounting fees, and travel to client locations. They might not be able to claim regular everyday sportswear if it could be worn personally, but they may claim genuinely protective or specialized equipment. If they train clients at home, they might claim a proportion of home costs only if a dedicated space is used for business sessions, and even then, the claim must reflect business use.

Example 2: Evening Etsy seller

An online seller might claim: materials, packaging, shipping labels, marketplace fees, photography props used specifically for product images, website or listing tool subscriptions, a portion of home internet, and the cost of a printer used mainly for shipping. If they use their dining table to pack orders, they may claim some homeworking costs based on time and space, but they should avoid claiming as if the dining room is an exclusive business premises.

Example 3: Freelance consultant with a full-time job

A consultant who does occasional projects might claim: professional indemnity insurance, software subscriptions, a portion of phone and internet costs, travel to client sites, and professional fees. If they buy a laptop for consulting work that is also used personally, they would apportion. They might also claim the cost of a coworking space day-pass used specifically for client meetings. They should keep invoices and be clear about the business purpose of each expense, especially if the consulting is irregular.

How to make your expense claims “audit-proof” in everyday life

You don’t need to be perfect, but you do want to be credible. Here are habits that make your expense claims easier to justify:

• Use a separate account or card for business spending.

• Keep receipts and match them to transactions regularly.

• Make notes for any purchase that could look personal (“ring light for product photography,” “train ticket to client meeting,” etc.).

• Keep a mileage log if you drive for business.

• Apportion mixed expenses using a consistent, reasonable method.

• Avoid claiming anything you’d struggle to explain calmly to an outsider.

• Revisit your claims once a year to ensure they still reflect reality as the business grows.

Registration thresholds and compliance: expenses aren’t the only issue

Claiming expenses is part of the compliance picture, but not the whole thing. Depending on where you live, there may be registration requirements for self-employment, business taxes, sales taxes/VAT/GST, local permits, or industry-specific rules. These obligations can apply even to part-time businesses, especially once income crosses certain thresholds. While the ability to claim expenses usually exists once you are carrying on business activity, compliance failures can create bigger problems than a missed deduction.

If your business is growing, it’s worth reviewing your obligations early so you don’t accidentally miss registration deadlines. Doing that also helps your expense claims because a properly set-up business tends to have cleaner records and clearer separation between personal and business spending.

Choosing the right accounting approach: simple systems work best part-time

Many part-time businesses do well with a straightforward approach: track income and expenses monthly, keep receipts digitally, and categorize spending into a small number of buckets. The goal is to make your year-end reporting accurate without turning bookkeeping into a second job.

Cash-based accounting (recording income and expenses when money changes hands) can be simpler for part-time operations, while accrual-based accounting (matching income and expenses to when they are earned and incurred) can be more accurate for businesses with stock, invoices, and more complex transactions. Which method you use may be dictated by local rules or by what makes sense for your business model.

So, can you claim expenses for a business you run part-time?

In most cases, yes: you can claim allowable business expenses even if you run the business part-time, as long as the costs are genuinely connected to the business and you handle any private element properly. The part-time nature of the business mainly affects how often you’ll have mixed-use expenses and how important it is to keep records that clearly show what is business and what is personal.

The safest approach is to claim expenses that are clearly and directly related to earning income, keep documentation, and be conservative with anything that has a personal benefit. If your situation is complicated—especially if you have significant homeworking claims, recurring losses, major equipment purchases, or mixed-use assets—it can be worth getting professional advice so you claim what you’re entitled to without stepping into avoidable risks.

Practical checklist to apply today

• List your regular business expenses by category (tools, software, marketing, travel, insurance).

• Identify mixed-use costs and decide on a fair apportionment method.

• Set up a separate bank account or card for business spending if possible.

• Create a simple receipt storage system (monthly folders, scanned receipts).

• Start a mileage log if you travel for business.

• Review your pricing and profitability so your business looks and behaves like a commercial activity.

• Keep brief notes for any expense that might need explanation later.

With these steps, a part-time business can claim expenses confidently and accurately, while keeping admin manageable and reducing the risk of mistakes.