What can you claim in your Self-Assessment Tax Return? (and what you can’t!)
Filing a self-assessment tax return can feel overwhelming but knowing what expenses you can claim can reduce your tax bill legally. However, getting it wrong could mean penalties or unwanted attention from HMRC.
Here’s a simple guide to help you understand what you can claim – and what you should avoid!
Allowable Expenses: What can you claim?
HMRC allows you to deduct business expenses from your income, meaning you only pay tax on your profits. To qualify, an expense must be “wholly and exclusively” for business use.
Here are some common tax-deductible expenses:
- Office Costs – Rent, business rates, utility bills, phone and internet costs, stationery, and printing.
- Home Office (if applicable) – If you work from home, you can claim a portion of rent, heating, electricity, and internet based on your business use. HMRC also allows a simplified flat rate if you don’t want to calculate individual costs which in most circumstances is more tax-efficient.
- Travel & Mileage – Fuel, public transport, flights, taxis, accommodation for business trips, and food costs when staying overnight.
- Vehicle Costs – You can either claim a fixed mileage rate (45p per mile for the first 10,000 miles, 25p after that) or actual car running costs if the vehicle is exclusively used for business.
- Marketing & Advertising – Costs related to website hosting, online ads, networking events, and social media promotion are fully tax-deductible.
- Professional Fees – Accountancy fees, legal advice, and subscriptions to professional organisations relevant to your business.
- Insurance – Business insurance policies such as professional indemnity, public liability, and employer’s liability.
- Training & Development – Courses and training directly related to your business activities can be claimed.
- Employee Wages & Subcontractors – If you employ staff or use freelancers, their salaries and subcontractor payments are deductible.
- Stock & Materials – If you buy stock, raw materials, or goods for resale, these are considered business expenses.
Now, onto what you can’t claim (sorry!)
Some expenses might seem business-related but don’t qualify for tax relief.
Common mistakes include:
- Personal Expenses – Anything used personally or partially for business must be proportioned correctly; otherwise, it’s not allowable.
- Client Entertainment – Meals, drinks, and event tickets for clients are not tax-deductible (though staff entertainment, like Christmas parties, can be under certain conditions).
- Clothing – Unless it’s a uniform, protective gear, or required workwear, you can’t claim clothing expenses.
- Fines & Penalties – HMRC won’t allow claims for parking fines, speeding tickets, or penalties for late filings.
- Loan Repayments – While interest on business loans may be deductible, the repayments themselves are not classed as expenses.
How to keep your expenses HMRC compliant
- Keep Good Records – Store receipts, invoices, and bank statements to back up your claims in case of an HMRC review.
- Separate Business & Personal Finances – Having a dedicated business account makes tracking expenses much easier.
- Use Accounting Software – Tools like QuickBooks, Xero, or FreeAgent can automate and categorise expenses correctly.
- Consult an Accountant – Many self-employed individuals miss out on claims they didn’t even realise were possible!
Final Thoughts – knowing what you can and can’t claim in your self-assessment tax return helps you stay compliant while reducing your tax bill. But with tax rules changing regularly, having an expert on your side ensures you don’t miss out on legitimate savings.
Need help maximising your tax return? Our expert accountants specialise in self-assessment, helping you claim everything you’re entitled to – without any headaches. Get in touch today on 01296 681341 or contact us here.
