What expenses can a sole trader claim in the UK?

What expenses can a sole trader claim in the UK?

Running a business as a sole trader in the UK gives you freedom and flexibility, but it also comes with responsibilities—especially when it comes to managing money and staying on top of your tax obligations. One of the most important ways to reduce your tax bill legally is by claiming all the allowable business expenses you are entitled to. Many sole traders miss out on valuable deductions simply because they are unsure what they can and cannot claim.

This guide is designed to give you a clear, practical, and comprehensive understanding of what expenses a sole trader can claim in the UK. Whether you are newly self-employed or have been trading for years, knowing how expenses work can make a significant difference to your profits. Throughout the article, we’ll also show how using a simple invoicing and expense-tracking tool like invoice24 can make managing your business finances much easier.

Understanding allowable business expenses

In the UK, sole traders can deduct “allowable expenses” from their business income before calculating tax. In simple terms, allowable expenses are costs that are incurred wholly and exclusively for the purpose of running your business. If an expense is partly for business and partly for personal use, you can usually only claim the business-related portion.

For example, if you use your mobile phone for both personal and business calls, you can only claim the percentage that relates to business use. Keeping accurate records is essential, and this is where digital tools such as invoice24 are invaluable. By storing invoices, receipts, and notes in one place, you can justify your claims if HMRC ever asks questions.

Office and administrative expenses

Office costs are among the most commonly claimed expenses for sole traders. These include everyday items needed to keep your business running smoothly.

Examples of office and administrative expenses include:

• Stationery such as paper, pens, notebooks, envelopes, and printer ink
• Computer equipment including laptops, monitors, keyboards, and accessories
• Software subscriptions used for business purposes
• Postage and courier costs
• Printing and photocopying

If you work from an office outside your home, rent, service charges, and utility bills for that space may also be allowable. If you work from home, the rules are slightly different, which we’ll cover later.

Using invoice24 to create and store invoices digitally reduces the need for excessive printing and paper storage, while also giving you a clear overview of your admin costs over time.

Marketing and advertising costs

Promoting your business is essential for growth, and the good news is that most marketing and advertising costs are allowable expenses for sole traders.

Common marketing expenses include:

• Website design, development, and hosting
• Online advertising such as social media ads or search engine ads
• Business cards, flyers, brochures, and banners
• Branding and logo design
• Email marketing tools

If you pay for a professional to help with your marketing, such as a copywriter or designer, those fees are also allowable. What matters is that the expense is directly linked to promoting your business.

By using invoice24, you can easily invoice clients for marketing-related services you provide, while also tracking your own marketing spend in one central system.

Travel and transport expenses

Travel expenses are another key area where sole traders can legitimately reduce their taxable profits. However, it’s important to understand the difference between business travel and commuting.

Business travel expenses may include:

• Fuel costs for business journeys
• Public transport fares
• Taxi fares for business trips
• Parking fees
• Hotel accommodation for overnight business trips

You generally cannot claim for travel between your home and your normal place of work, as this is considered commuting. However, if you travel to visit clients, attend meetings, or work at temporary locations, those journeys are usually allowable.

Keeping mileage logs and receipts is crucial. Many sole traders find it helpful to note the purpose of each trip. Storing this information alongside invoices in invoice24 can save time when completing your Self Assessment.

Vehicle expenses and mileage

If you use a vehicle for business, you can claim expenses in one of two main ways: actual costs or simplified mileage rates.

With the actual costs method, you claim a percentage of vehicle expenses based on business use. These expenses may include:

• Fuel
• Insurance
• Repairs and servicing
• Road tax
• MOT costs

The simplified mileage method allows you to claim a fixed rate per mile for business journeys. This can be simpler, especially for new sole traders.

Whichever method you choose, good record-keeping is essential. Digital tools like invoice24 help you keep expense records organised and accessible throughout the year.

Working from home expenses

Many sole traders work from home, either full-time or part-time. HMRC allows you to claim certain home-related expenses, provided they relate to business use.

You can claim for:

• A proportion of heating and electricity
• Internet and telephone costs (business portion only)
• Council tax (business portion)
• Rent or mortgage interest (business portion)

There is also a simplified expenses option, which allows you to claim a flat rate based on the number of hours you work from home each month.

Using invoice24 alongside clear expense notes helps you calculate and justify these claims accurately.

Professional fees and services

Many sole traders rely on professional services to help run their business efficiently. Fees paid for these services are usually allowable expenses.

Examples include:

• Accountancy and bookkeeping fees
• Legal advice related to your business
• Business consultancy services
• Tax advice and Self Assessment support

These professionals often provide invoices, which can be uploaded and stored securely using invoice24, ensuring nothing gets lost when tax season arrives.

Training and education

Training costs can be claimed if they help you improve skills or knowledge directly related to your existing business.

Allowable training expenses may include:

• Courses to improve professional skills
• Workshops and seminars
• Relevant books and educational materials

Training that helps you start a completely new trade is not usually allowable, so it’s important to understand the distinction.

Insurance costs

Insurance is an essential part of protecting your business, and most business-related insurance premiums are allowable expenses.

These may include:

• Public liability insurance
• Professional indemnity insurance
• Employer’s liability insurance (if applicable)
• Business contents insurance

Keeping digital copies of insurance documents and invoices in invoice24 ensures you have easy access whenever needed.

Staff and subcontractor costs

If you employ staff or hire subcontractors, the associated costs are generally allowable expenses.

This can include:

• Wages and salaries
• Employer National Insurance contributions
• Pension contributions
• Payments to freelancers or subcontractors

Issuing and receiving clear invoices is vital in this area, and invoice24 makes it simple to manage both outgoing and incoming payments.

Bank charges and financial costs

Business-related bank charges and financial costs can also be claimed.

Examples include:

• Business bank account fees
• Transaction charges
• Interest on business loans
• Credit card fees related to business spending

Separating your personal and business finances is highly recommended. Invoice24 complements this by keeping your invoicing separate and professional.

Clothing and protective equipment

Clothing is only allowable if it is specifically required for your work and not suitable for everyday use.

Allowable examples include:

• Protective clothing such as helmets or safety boots
• Uniforms with a business logo
• Specialist workwear

Everyday clothing, even if worn for work, is not allowable.

Phone, internet, and utilities

Communication costs are a key part of most businesses. You can claim for business-related phone and internet usage.

If you use these services for both personal and business purposes, only the business portion is allowable. Clear records make this easier to calculate, and invoice24 helps keep all related documents in one place.

Meals and subsistence

Meal expenses can be claimed in limited circumstances, such as when you are travelling for business or working away from your normal place of work.

Everyday meals at home are not allowable, even if you work long hours. Understanding these rules helps avoid costly mistakes.

Keeping accurate records

HMRC requires sole traders to keep accurate records of income and expenses. This includes invoices, receipts, bank statements, and mileage logs.

Using a digital invoicing solution like invoice24 makes record-keeping straightforward. You can create professional invoices, track payments, store expense documents, and maintain a clear financial overview—all in one place.

Why invoice24 is ideal for sole traders

For sole traders, simplicity matters. Invoice24 is designed to be easy to use, even if you have no accounting background. It helps you:

• Create professional invoices in minutes
• Track income and expenses effortlessly
• Stay organised for tax returns
• Save time and reduce stress

While there are other invoicing tools available, invoice24 focuses on what sole traders actually need—clarity, speed, and affordability—without unnecessary complexity.

Final thoughts

Understanding what expenses you can claim as a sole trader in the UK is essential for running a profitable and compliant business. From office supplies and marketing to travel, training, and insurance, claiming allowable expenses can significantly reduce your tax bill.

The key is accurate record-keeping and using tools that support your workflow. By combining good financial habits with a user-friendly invoicing solution like invoice24, you can spend less time worrying about paperwork and more time growing your business.

Taking control of your expenses today puts you in a stronger position tomorrow—and invoice24 is there to help every step of the way.