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What Expenses Can You Claim On Your HMRC Tax Return?

We asked a qualified accountant what tax expenses are allowable/disallowable by the HMRC on your tax return; this is what they said

We asked a qualified accountant what tax expenses are allowable/disallowable by the HMRC on your tax return; this is what they said

January 31st is the HMRC Self Assessment filing deadline for submitting your self-assessment tax return and paying any applicable taxes/tax liability. 

Who needs to submit a tax return?

You must send a self-assessment tax return if, in the last tax year (April 6 2022 to April 5, 2023), any of the following applied:

  • You were self-employed as a 'sole trader' and earned more than your personal allowance of £1,000 (before taking off anything you can claim tax relief on)

  • You were a partner in a business partnership

  • You had a total taxable income of more than £100,000

  • You had to pay Capital Gains Tax when you sold or 'disposed of' something that increased in value

  • You had to pay the High Income Child Benefit Charge

You may also need to send a self-assessment tax return if you have any untaxed income, such as:

  • Some COVID-19 grant or support payments

  • Money from renting out a property

  • Tips and commission

  • Income from savings, investments, and dividends

  • Foreign Income

You can choose to fill in a tax return to:

  • Claim some Income Tax reliefs- the obligation is on you, not on HMRC, to tell you

  • Prove you're self-employed, for example, to claim Tax-Free Childcare or Maternity Allowance

  • Pay voluntary National Insurance contributions

What Expenses Can I Declare On My Self-Assessment Return?

Polly Arrowsmith is a qualified accountant and, tax adviser, and mental health & poverty advocate. 

Polly Arrowsmith is a qualified accountant and, tax adviser, and mental health & poverty advocate. 

As a tax expert, Polly is often asked what expenses are acceptable to put on an HMRC Self-Assessment form. There is generally a lot of confusion about what actual expenses are and what can be claimed on the return as expense/tax deductions, so Polly has given us the answers to the most common queries.

First things first

It's important to remember that the HMRC can and will change rules so things can change, sometimes retrospectively or with 24-hour notice, but this is only when the HMRC decides that things have been abused. The principles, however, always stay the same.  The basic principle is reasonableness.

Therefore, if you're unsure, speak to an accountant for the latest advice, and if you have reservations about putting through your own tax return, you'll find accountants will submit a basic tax return for you, from around £100 +vat upwards, which might be a small price to pay for peace of mind! 


Expenses deductible from your PAYE for employed status are "incurred wholly, exclusively and necessarily incurred for employment."

You can do a self-assessment form if your employer has left expenses off the payroll, but it is your choice. You'll need to register with HMRC to fill in a self-assessment form. You can write or, more accessible, report on the HMRC gateway. Register online ten days before any filings are due, as you need to get a password sent through the post. Make sure that HMRC has an up-to-date address.

For self-employed, expenses deductible from your revenues or zero revenue, creating a tax loss is allowed are "incurred wholly and exclusively for the trade.""

Term definitions:

Necessarily: This is interpreted as meaning that every individual holding that particular job would have to incur the expenditure. Unfortunately, any expense that arises for some personal reason will be excluded. This is one of the reasons why the cost of work travel is disallowed. One individual who lives ten miles away from the workplace must travel that distance each morning and each evening. However, another individual might live next door to the workplace. As such, the cost of travel is not 'necessary' within the meaning of the law.

Wholly and exclusively: This part of the employment expenses rule picks up a phrase used for business expenses generally. The main result of the 'wholly and exclusively' part of the rule is to prohibit the cost of expenditure with a private purpose and a business one. If a particular proportion of the expense can be identified, then that part can be allowed. For example, if proper records are kept, a mobile phone user may be able to show that a percentage of the total use is for business purposes. Where this is the case, that proportion of the cost of the calls satisfies the 'wholly and exclusively' rule.

By contrast, however, the cost of clothing or food, for example, simultaneously serves both a private and a business purpose. Such expenses are, therefore, disallowed in full.

If you are a self-employed person, this allows a wider variety of expenses to be allowable.

Basic rules:

1. Being self-employed means that HMRC requires you to register for self-assessment unless your revenue exceeds £1,000 pa. This may mean e-baying things that net you less than £1,000 pa is yours to keep. Otherwise, HMRC considers this trading, and you should include it in your self-assessment. This is your choice, as you are unlikely to be picked up unless the amounts are substantial.

2. You can back-date expenses for up to 6 years from the date you start your business. This covers anything from your mobile to training, which can be a considerable sum.

3. Anything you can argue with HMRC as being business-related, you can claim. HMRC has the right to ask questions, so please ensure you are comfortable defending the costs and have the relevant documents to hand. HMRC reserves the right to charge you for tax on things it considers disallowable unless you want to appeal by letter or, for more significant amounts, a Tribunal.

4. HMRC has records of people in your sector or similar, and they know what your accounts should look like. This means any abnormalities can be picked up and challenged, in which you need to provide either a rationale or/ or evidence.

5. You can create a tax loss and carry this forward indefinitely to offset against future profits.

6. Are you cash basis accounting- i.e., just accounting for revenues and expenses as they are incurred OR accrual accounting- accounting for revenues and expenses when they fall due? You are unable to mix and match. The simplest one is cash accounting.

7. It is difficult to offset certain taxes against each other. So, capital gains and losses should be treated separately from income tax.

8. If you have any doubts, please ask HMRC in writing or on the phone. Otherwise, if you have any doubts, please feel free to leave it out.

Expenses allowed:

Set up costs

Company set up

Company House fees

Accountancy packages

Any relevant expenses in the past six years to the starting date of your business





Your mortgage and utilities OR rent a room at £7,500 pa

You can claim a proportion of your gas, electric, water, broadband, and telephone bills as allowable expenses when working from home. However, it would be best to calculate how much each bill applies to your business.

For example, if you work from a five-room house (kitchens and bathrooms do not count as ''rooms''), and one room is used exclusively for business purposes, you can claim 20% of your annual bills as self-assessment expenses on your tax return. The same rules apply to your mortgage interest (not capital repayments- you can pull these from your annual statements) or annual rent costs.

If the room serves another purpose (e.g., a spare bedroom) or you only work from home one day a week, you need to apportion the costs associated with that room according to business use. HMRC does not provide clear guidance on how this should be done – you need to apportion the expenses between business use and personal on a ''fair and reasonable'' basis. I take this as what I would be happy to defend to HMRC.

It's' worth bearing in mind that if you sell your home, Capital Gains Tax will apply to the part of the property used for business, which serves a dual purpose. For this reason, it's' best to avoid employing a room in your home solely for business purposes. This is unlikely to be picked up, so it is a personal choice based on the basis it could be picked up.

Alternatively, you can claim that your business rents a room in your house and deduct £7,500 pa. You can not pay pro-rota expenses such as heating, water, or council tax. It is one or another, never both.

The same £7,500 allowance means you can rent a room to a lodger without tax. Anything over £7,500 on income tax becomes taxable at your marginal tax rate.

Council Tax

Many Self-assessment users must remember council tax when calculating their annual business expenses. But in the same way that you're permitted to count a portion of your mortgage interest/rent or utility bills against the cost of your tax bill, you can also factor in part of your council tax bill.

If your home office accounts for 20% of the space in your property, then you can claim up to 20% of the cost of your council tax on your annual Self Assessment tax bill.

If you rent a room, you can not claim any additional costs.

Office Supplies

Your desk phone

Your mobile phone



A fax machine

Postage costs

Business stationery

Printing costs

Printer ink and cartridges

Any computer software that your business has used for less than two years

Any computer software your company operates and makes regular payments to renew the license.

Laptop, tablet, or home computer, if bought solely for business- 100% allowable or if for personal use as well say 50%- as insofar as it's' used for business. That means if you have purchased a computer in the previous tax year that you're only using for business 50% of the time, you can only claim the cost of that computer as a business expense on a pro-rata basis of 50%


You cannot claim for non-business driving or travel costs, fines you incur while driving, or any travel between your home and your regular place of work. If you were going to see a client, you could expense that as business activity. What if your normal place of work is home- then all travel expenses are allowable if you travel for work.

Mileage costs

If you drive a car or van for work, you can claim 45p off your tax bill for every mile travelled up to 10,000 miles. After that, the mileage allowance you can claim is reduced to 25p.

For example, you drove 11,000 business miles last year, and you can claim £4,500 in self-assessment expenses for your first 10,000 miles and £250 for the other 1,000 miles – leaving you with the ability to claim £4,750.

Motorcycles are slightly less at a flat rate of 24p per mile for any mileage.

Motor vehicles can have VAT implications, and there are benefits to having an electric car.

Allowable motor expenses include:

Vehicle insurance

Repairs and servicing



Hire charges

Vehicle licence fees

Breakdown cover

Train, bus, air, and taxi fares

Hotel rooms

Meals on overnight business trips

The cost is allowable if you must get a passport quickly. If you generally renew it, then it is not acceptable.

Meals and drinks while travelling, yes.

Magazines and entertainment while travelling- no.

Legal and financial costs

When calculating your Self Assessment expenses, you should include any costs associated with hiring an accountant, solicitor, architect, or any other professional you've' paid to assist you.

Likewise, you can claim costs for professional indemnity insurance premiums – and a range of other bank and insurance costs. 

Allowable Banking Expenses Include:

Bank, overdraft, and credit card charges

Personal bank, overdraft, and credit charges on your account if spent on your business. For your personal use ( I would advise you to have separate personal and self-employed bank accounts)

Interest on bank and business loans

Hire purchase interest

Leasing payments

Alternative finance payments, such as Islamic finance

Using cash-based accounting, you can only claim up to £500 in interest and bank charges on your Self-Assessment form.

You're not allowed to claim any legal costs associated with buying property or machinery, although if you use traditional accounting, you can claim them as capital allowances instead. Similar to travel expenses, you are also not permitted to claim any legal or financial costs you've' been forced to incur by breaking the law.

Unpaid invoices

You can deduct any invoices you feel will not be paid. You must account for this bad debt if they are born later in the next period.

Any costs to chasing any unpaid invoices are allowable.


Bulk mail advertising

Any costs associated with free samples you've' produced and distributed

Website hosting and maintenance costs



Social media costs include photos taken by a professional

Entertainment for each staff member per annum unless deemed excessive.

Debatable costs

Entertaining clients or suppliers or event hospitality expenses

A membership to a Private Members Club is wholly and exclusively used for business, or you can pro-rota costs if used for personal and business and members.

Clothes and appearance

You're not allowed to claim the contents of your entire wardrobe as an allowable expense, but you can claim certain clothing items to reduce your Self-assessment tax bill at the end of each financial year.

Permitted clothing expenses include:

Work-related uniforms

Protective clothing needed for your work

Costumes for actors or entertainers

Unlike travel expenses, you can deduct the entire cost of work-related clothing.

Unfortunately, you can't claim for everyday outfits you wear to work.

Work-specific clothing items, such as a Barrister robe going to criminal court, must be necessary to qualify as a business expense.

If your profession depends on your appearance, you can claim gym membership, trainers, beauty or cosmetic surgery treatments, and a dietician. So a model or a TV presenter can cover all these expenses. You might find HMRC interested if you earned very little from these occupations. They look at the reasonableness of your expenses in proportion to your earnings.

If you paid to get hair or make-up for a photo shoot, you could expense the services, but the tax man may look more carefully if they believe that you are putting expenses through that are not wholly or exclusively necessary to perform your role.

Staff costs

Suppose you employ permanent workers, seasonal employees, or contractors to help you run your business. In that case, you can claim a wide range of expenses associated with their employment when filing your Self Assessment return, including:

Employee and staff salaries



Agency fees


Employer's National Insurance

Business-related training courses

There are a couple of staff costs that HMRC does not view as permitted business expenses. For example, you cannot claim costs associated with a nanny or childminder expenses. You may be able to proportion a cleaner's fees, but only for your office space, or if your separate business premises are being cleaned, you can expense this 100%.


Are you subscribed to professional bodies or trade publications directly feeding into your job? If so, you can claim those subscription costs as self-assessment expenses.

Permitted expenses include a subscription to any trade professionals or academic journals. Likewise, a subscription or annual membership of a professional organisation or a union will also apply as a permitted expense.

Any payments you make to a political party can't be claimable subscriptions. Likewise, you can only claim personal subscription expenses like a gym membership or a glossy magazine if they are wholly and exclusively for your business; PR, advertising, and marketing could be claimed for glossy magazines.

You should not claim donations to a charity as a subscription – even if you're' donating on a subscriber-level membership. These expenses can be tallied up as charitable donations, which have their rules.


It depends on the training and if it is wholly and necessarily allowable. Here, you start to understand that the definition is debatable.

An IT training course is allowable for an IT consultant. An acting or personable development course may be admissible as the skills gained would be used in your business. A pottery course will only be accepted if you train to become a potter, in which case 100% would be good.

Donations to a charity

Did you give money to charity last year? If so, you should claim those donations as Self-assessment expenses on your tax return.

All donations made by individuals to registered charities or community amateur sports clubs (CASCs) are 100% tax-free. This is called tax relief, which depends on how you choose to donate funds.

Typically, charitable donations are either made through:

Gift Aid

Directly from your wages or pension through a Payroll Giving scheme

Land, property, or shares

Your will

This tax relief means that if you donated £1,000 to a registered charity last year and are a higher-rate taxpayer, you can claim back £250 on your Self-Assessment form.

Charitable tax relief rules also apply to sole traders and partnerships but not to donations made on behalf of limited companies.

Here are a few extra tips from Polly:

  • You must claim any tax allowances as they may not be automatically applied. Billions go unclaimed every year.

  • Could you check your tax code? It may need to be corrected. After Polly reviewed it for him, her partner got £5k back, as he was on a month 1 code.

  • It's a good idea to never leave filing until 11.59pm on 31 January 2024, as so many other people are also filing!

  • Ignorance is no defence in tax ( or any other legal matter).


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