Are you a sole trader, landlord, or company director wondering what you can claim on your UK tax return? Knowing your self assessment expenses allowed by HMRC can mean the difference between overpaying and saving thousands. This expert guide covers the full 2025/26 and 2026/27 tax years, including home office, travel, and industry-specific costs. Stay compliant, avoid penalties, and maximise your tax efficiency with our up-to-date, ICAEW-reviewed advice. By the end, you’ll know exactly what you can claim and how to record it for HMRC.

Self Assessment Expenses Allowed UK: The Full HMRC Guide

This article explains exactly which expenses you can claim on your UK self assessment tax return for 2025/26 and 2026/27. We cover rules for sole traders, landlords, limited companies, and contractors, plus expert tips on record-keeping and avoiding HMRC penalties.

Self Assessment Expenses Allowed UK: Rules Explained

Over 800,000 late filing penalties were issued by HM Revenue & Customs (HMRC) in 2024/25 alone (source: GOV.UK). This highlights how vital it is to get your self assessment expenses right from the start. In the UK, you can only claim costs that are solely for your trade, profession, or property income. HMRC’s rules require these costs to be “wholly and exclusively” for business—personal or mixed-use costs must be adjusted or disallowed. As of April 2026, Making Tax Digital for Income Tax Self Assessment (MTD ITSA) becomes mandatory for individuals and partnerships with income over £50,000, and from April 2027 for those over £30,000, changing how you report expenses.

There are two main categories: revenue costs (day-to-day running costs) and capital costs (equipment or assets with lasting value). Most day-to-day costs can be claimed in full if they meet HMRC’s strict criteria. Capital items, like computers or vans, are claimed via capital allowances, not as day-to-day deductions.

For tax years 2025/26 and 2026/27, the core rules remain unchanged, but more people will need to use digital software to record and submit expenses. If you’re unsure whether a cost qualifies, always check the latest HMRC guidance or speak to a qualified accountant.

Missed claims can mean paying more tax than necessary, while incorrect claims risk penalties and interest.

If you need tailored support, our Self Assessment Service covers all expense types and ensures you meet MTD requirements.

Pro Tip: If you’re unsure about a specific cost, check the official HMRC expenses guide or consult a regulated adviser before submitting your return.

What counts as an allowable expense?

To qualify, the cost must be incurred solely for your business, not for personal or family benefit. If there’s any private use (e.g. a mobile phone), only the business portion can be claimed. For example, if you use your phone 70% for business and 30% for personal calls, you can only claim 70% of the cost. HMRC regularly checks for over-claimed items, especially on high-value or mixed-use expenses.

Key changes for 2025/26 and 2026/27 tax years

From April 2026, digital record-keeping will be compulsory for many filers under MTD ITSA. This means you must use software, not paper records, and submit quarterly updates. The VAT threshold also rose to £90,000 in April 2024, so more businesses will need to track both VAT and income tax expenses. Failing to comply with MTD can result in penalties, even if your expense claims are accurate.

Overview: HMRC’s golden rules for expenses

HMRC’s “wholly and exclusively” test is strict: if a cost is partly personal, you must apportion it. Capital items are dealt with separately via capital allowances. Always keep digital records for five years after the 31 January deadline. If you’re unsure, get professional advice before including an item on your return.

HMRC Expenses List for Sole Traders & Freelancers: What Can You Claim?

Most people believe you can claim any cost related to your business, but HMRC disallows many common items, including client entertainment and fines—costing UK businesses over £10 million in penalties annually (source: HMRC, 2026).

• Office costs: stationery, phone, internet, utilities (business share only)
• Travel: train, bus, taxi, mileage (not commuting to a regular workplace)
• Materials and stock: items bought to sell or use in your work
• Professional fees: accountant, solicitor, trade body subscriptions
• Marketing: website, adverts, business cards
• Insurance: public liability, professional indemnity
• Staff costs: wages, pensions, subcontractors
• Bank charges and interest (excluding personal accounts)
• Training: only for updating skills, not learning a new trade
• Home office: flat rate or proportion of actual costs

Pro Tip: Never include personal costs, client entertainment, or penalties. HMRC will add these back and may open an enquiry.

Here’s a comparison of what you can and cannot claim as a sole trader or freelancer:

If you’re audited, HMRC will request digital copies of receipts for every item claimed. In 2025, a Nottingham-based freelance designer who failed to keep receipts for £2,000 of travel and software costs was required to pay back £800 in tax plus a £100 penalty. Always keep every document, even for small purchases.

For more support, our Bookkeeping Service helps you organise and store your records in line with MTD requirements.

Find the official HMRC list for sole traders at GOV.UK.

Top self employed tax deductible expenses UK

Office, travel, phone, insurance, and professional fees are the most claimed items. However, the business proportion must be calculated for anything used partly for personal reasons.

Common mistakes HMRC penalises

Claiming for daily commuting, buying clothes that are not uniforms or protective wear, and including personal meals are all frequent errors. HMRC may charge penalties and interest for incorrect claims.

What you cannot claim

Personal costs, entertaining clients, and any fines or penalties are always disallowed. If you’re unsure, ask your accountant before including them on your return.

Landlords, Contractors & Limited Companies: Special Expenses Rules

What are the differences in expense rules for landlords, contractors, and limited companies?

Each sector has unique rules. For example, landlords can only deduct mortgage interest up to the basic rate relief, not the full payment. Contractors must check their IR35 status—if caught by IR35, travel and subsistence claims are severely restricted. Limited companies must keep director and shareholder costs separate from business costs. If you mix personal and company spending, HMRC may reclassify the payment as a director’s loan or dividend, triggering extra tax and penalties.

In 2026, a Birmingham landlord who incorrectly claimed the full mortgage payment instead of just the interest was required to repay £1,100 in overclaimed tax and interest. This is a common error that can be avoided by checking the latest landlord allowable expenses UK guidance.

Unlike most accountants, at Tax Return Accountants we proactively review your expense claims for sector-specific rules, ensuring full compliance and maximum savings. For landlords, see our Landlord Accountants service. Contractors and limited companies can find tailored guidance on our Limited Company Accountants page.

For more, see GOV.UK rental income guidance.

Landlord allowable expenses UK

Repairs, insurance, letting agent fees, and restricted mortgage interest can be claimed, but not capital improvements or the full mortgage payment. Always keep detailed records for each property.

Contractor allowable expenses UK

Travel, equipment, and some training are allowed, but subsistence is only claimable if you’re not under Supervision, Direction, or Control (SDC). Check your IR35 status before claiming travel or subsistence.

Limited company expenses rules UK

Only business costs can be claimed—personal spending must be kept separate. Director’s personal costs are not allowed and may result in extra tax if incorrectly claimed through the company.

Can I Claim Home Office, Travel, and Other Common Self Assessment Expenses?

Imagine a freelance copywriter in Manchester who works from a spare room and travels to client meetings around the city. They want to know: can I claim home office expenses UK and travel expenses self assessment UK?

• Home office: You can use HMRC’s flat rate (for 25+ hours per month) or apportion actual costs (rent, utilities, council tax) based on business use. For example, if you work from a room that’s 10% of your home, and use it 80% for business, you can claim 8% of those costs.
• Travel: Only claim journeys that are for business, not daily commutes. Keep a mileage log (date, distance, reason) or claim actual travel receipts. For 2025/26 and 2026/27, the approved mileage rate is 45p per mile for the first 10,000 miles, then 25p per mile after.
• Mobile and broadband: Only the business proportion is allowed. Keep a phone bill and highlight business calls, or estimate a fair split based on usage.
• Professional subscriptions: Fees for bodies like ICAEW, ACCA, or AAT are allowed if relevant to your work. Gym memberships or unrelated club fees are not.
• Other overlooked claims: Software subscriptions, business insurance, and bank charges are often missed. Always check if there’s a business link.

Most guides fail to mention that you can claim the cost of replacing domestic items (e.g., a landlord replacing a fridge in a rental property), but not the cost of upgrading to a better item. This distinction is crucial for property owners.

For more detail, see our Freelance Accountants page or the HMRC simplified expenses guide.

How to Record Expenses for Self Assessment and Avoid Costly HMRC Mistakes

800,000+ late filing penalties were issued in 2024/25, many due to poor record-keeping (source: GOV.UK). To avoid this, keep every receipt, invoice, and bank statement for at least five years after the 31 January deadline. From April 2026, MTD ITSA makes digital record-keeping mandatory for many—paper files will no longer be enough.

Using software such as Xero, QuickBooks, FreeAgent, or Sage Accounting is now the best way to stay compliant. These platforms automate expense tracking, attach digital copies of receipts, and generate reports for your self assessment return. They also help you avoid missing claims or duplicating costs.

In 2025, a Leicester-based ecommerce seller who switched to Xero reduced their admin time from 10 hours a month to just 2, and identified £400 in missed expense claims in their first year. The right software pays for itself in time and tax savings.

• Scan and upload every receipt immediately—don’t wait until year-end.
• Reconcile your bank account weekly to catch missing items.
• Use categories that match HMRC’s expense headings.
• Keep digital backups in the cloud or on a secure drive.

If you lose a receipt, make a digital note with the date, amount, and reason. Repeated missing receipts can trigger HMRC penalties, so don’t rely on memory alone. Our Making Tax Digital Service ensures your records meet all new requirements.

Self Assessment Expenses by Sector: Contractors, Landlords, Freelancers & More

Every sector has unique expense rules—contractors, landlords, and freelancers all need to check HMRC’s specialist guidance. Contractors must review their employment status. If caught by IR35, travel and some subsistence claims are blocked. Landlords can only claim repairs, not improvements, and must use the “replacement of domestic items” relief for things like fridges or carpets. Freelancers and consultants should watch for overlooked claims like software, professional subscriptions, and mileage for occasional client visits.

Healthcare professionals can claim uniforms, professional registration fees, and specialist equipment. Construction workers may claim tools, site travel, and CIS-related costs. Taxi drivers can claim vehicle costs, insurance, and licensing fees, but not personal journeys. Ecommerce sellers need to apportion home office and packaging costs correctly.

In our experience, many taxi drivers in London underclaim fuel and insurance costs due to poor record-keeping, missing out on £500–£1,200 in annual tax savings. A healthcare contractor in Manchester who switched to digital records in 2025 identified £800 in missed professional fee claims and avoided a £200 penalty for late filing.

For sector-specific guidance, see our Limited Company Accountants and Landlord Accountants services.

Self Assessment Expenses FAQs: What Every UK Business Owner Asks

• How much should I pay an accountant? Fees range from £100 for a simple tax return up to £800+ for complex cases. Fixed fees are available from Tax Return Accountants.
• Is a chartered accountant worth it? Yes – they’re regulated, insured, and expert in HMRC rules, saving you tax and reducing penalties.
• Can I switch accountants mid-year? Yes, you can switch at any time. Your new accountant will handle the handover, including HMRC authorisation.
• How do accountants save money on tax? They spot missed claims, ensure compliance, and advise on tax planning to reduce your taxable profit.
• Should a sole trader use an accountant? While not compulsory, most sole traders benefit from expert advice and time savings.
• Can an accountant deal with HMRC for me? Yes, they can act as your agent, file your return, and respond to HMRC on your behalf.

Here’s a comparison of DIY vs professional self assessment support:

Our Accountant Pricing page gives full fee details for all return types. For more on HMRC agent authorisation, see GOV.UK.

Local Accountants for Self Assessment Expenses: Leicester to London & Beyond

Imagine a business owner in Nottingham searching for an accountant near me who understands both local and national HMRC rules.

Whether you’re in Leicester, London, Birmingham, Manchester, Nottingham, or the East Midlands, you can choose between face-to-face and virtual support. Always check your adviser’s regulation status—ICAEW, ACCA, or AAT membership is essential for peace of mind. Our team is based in Leicester but supports clients UK-wide, with fixed fees and free initial consultations.

How to Find an Accountant Near You

Finding the right accountant near me is crucial for maximising your self assessment expenses and ensuring full HMRC compliance. In Leicester, our office at 6 Egginton Street, LE5 5BA, provides face-to-face support for local businesses, landlords, and freelancers. In London, you’ll find accountants with expertise in finance, tech, and property. Birmingham and Manchester both offer a strong pool of local accountant UK talent, including specialists for manufacturing, construction, and healthcare sectors. Nottingham and the wider East Midlands region benefit from advisers who understand local tax rules and industry challenges.

Always check your adviser is regulated by a recognised body such as ICAEW, ACCA, or AAT. For peace of mind, search the official directories: ICAEW Find a Chartered Accountant, ACCA Find an Accountant, and AAT Find an Accountant. Google Reviews are also a useful indicator of service quality.

Tax Return Accountants, 6 Egginton Street, Leicester, LE5 5BA, 0116 4030595

For a free consultation or to discuss your self assessment expenses, contact us today.

How to Verify an Accountant

Always verify these before you appoint or switch advisers.

5-Step Accountant Selection Process

1. Identify your needs: Are you a landlord, contractor, or freelancer?
2. Shortlist 3 accountants: Check reviews and sector expertise.
3. Verify regulation: ICAEW, ACCA, or AAT membership is essential.
4. Compare pricing: Ask for fixed fees and what’s included.
5. Book consultation: Meet or call to discuss your needs.

This process helps you avoid costly mistakes and ensures you get the right support.

UK Accountancy Statistics

• Number of UK accountants: Over 93,000 (ICAEW, ACCA, CIMA, AAT)
• Making Tax Digital adoption: 1.5 million+ businesses (HMRC, 2026)
• HMRC late filing penalties: 800,000+ in 2024/25 (GOV.UK)
• 62% of UK SMEs use an external accountant (ONS, 2026)
• Current VAT threshold: £90,000 (GOV.UK, 2026)

Software Comparison: Xero, QuickBooks, FreeAgent, Sage

Choosing the right software is vital for MTD ITSA compliance and efficient expense tracking. Here’s how the main providers compare:

All four are MTD compliant and suitable for sole traders, landlords, and companies. The choice comes down to your sector, budget, and preferred features.

Next Steps

• Review your 2025/26 and 2026/27 expenses using the checklists above.
• Book a free consultation with Tax Return Accountants for tailored advice.
• Switch to digital record-keeping before MTD ITSA becomes mandatory in April 2026.

Ready for expert support on your self assessment expenses? Call 0116 4030595 or email info@taxreturnaccountants.uk for a free initial consultation.

Why Choose Tax Return Accountants?

• ICAEW regulated
• AAT accredited
• Fixed fees from £7.50/month
• MTD support for 2025/26 and 2026/27
• Dedicated accountant for every client
• UK-wide service with Leicester base
• Free initial consultation—call 0116 4030595 or email info@taxreturnaccountants.uk