If you are a sole trader, Self Assessment is not only about filing a tax return on time. It is also about keeping proper records, understanding which costs are genuinely allowable, and making sure you can support what you claim if HMRC ever asks to see the evidence.
HMRC’s rule is that expenses must be incurred wholly and exclusively for your business. If a cost is partly for business and partly for personal use, you can normally only claim the business part.
At Asmat & Co Accountants, the focus is on keeping things practical and easy to follow. If you stay organised from the start, claiming the right expenses becomes much simpler. That is true whether you use support with tax returns, bookkeeping services, sole trader accounting, or wider accountancy services.
What you can usually claim as a sole trader
HMRC allows sole traders to claim a range of business expenses, including office costs, travel costs, some clothing costs, staff costs, stock, legal and financial costs, marketing, and certain training costs, as long as they are for the business.
Office, software, and day-to-day running costs
You can usually claim the everyday costs of running your business. That can include items such as stationery, postage, printer ink, business phone bills, software subscriptions, and internet costs where they relate to work. If you buy equipment such as a laptop, office chair, or printer for the business, that can also be allowable, depending on how it is used and how you prepare your accounts.
This is where tidy bookkeeping really helps. If you leave everything until year end, it becomes much harder to separate genuine business spending from private spending. Pages such as financial reports and help resources can also give you a clearer view of how your records fit together.
Working from home
If you work from home, you may be able to claim part of your household running costs. HMRC says this can include a reasonable share of heating, electricity, Council Tax, rent, mortgage interest, phone use, and internet use where they relate to the business. You can work this out using actual costs or, in some cases, simplified expenses.
The important point is that the amount must be reasonable. If your home broadband is used for both business and personal use, you should only claim the business element. This is one of the most common areas where sole traders either overclaim or avoid claiming altogether.
Travel and vehicle costs
Business travel is often claimable, but only where the journey is for work. That may include train fares, parking, fuel, vehicle running costs, hotel stays for business trips, and meals on overnight business travel. HMRC also allows simplified mileage claims in some cases instead of working out actual vehicle costs. However, ordinary commuting and non-business travel are not allowable. Fines and penalty charges are not allowable either.
If you are unsure whether a journey counts as business travel, it is worth checking before you include it. A client meeting in another town is very different from your normal journey to a regular workplace.
Clothing expenses
This is one of the most misunderstood areas. You can usually claim uniforms, protective clothing, and costumes for performers. You cannot normally claim for everyday clothes, even if you wear them only for work. So, safety boots, branded uniforms, or protective outerwear may be allowable, but ordinary suits, shoes, and general workwear usually are not.
Stock, materials, and direct business costs
If your business buys stock to sell on, or raw materials to produce goods, those costs are normally allowable. The same applies to direct costs of producing or supplying what you sell. What you cannot do is claim for items bought for private use.
This can be especially important if you mix business and personal purchases on the same card. Clear records matter more than good intentions.
Staff, subcontractors, and outsourced help
If you employ staff, HMRC says you can usually claim wages, salaries, bonuses, employer’s National Insurance, pension contributions, agency fees, and payments to subcontractors. You may also be able to claim training costs that help you update existing skills used in your business.
If you have employees, payroll services can make a big difference. Keeping payroll records accurate is not only about tax compliance. It also helps you avoid unnecessary problems later.
Legal, financial, and professional costs
Many professional costs are claimable if they are for the business. That can include accountancy fees, business bank charges, credit card charges on business accounts, loan interest, insurance policies for the business, and certain legal fees. HMRC does not usually allow fines, penalties, or loan repayments themselves.
It is also sensible to get advice if your business is growing quickly. Depending on your situation, support from small business accountants, contractor accountants, or limited company accountants may become relevant.
Marketing and advertising costs
You can normally claim advertising and marketing costs such as online ads, website costs, brochures, mailshots, and free samples given out to promote the business. What you cannot usually claim is client entertaining or hospitality. That distinction is important. Taking a client out for a meal may feel like part of doing business, but that does not make it an allowable expense for tax purposes.
If you want to understand more about business support as you grow, pages such as who we help, about us, and the blog are worth exploring.
What evidence you need to keep
HMRC says you must keep records of your sales and business income, as well as proof of the expenses you claim. That means keeping documents such as receipts, purchase invoices, sales invoices, bank statements, cheque book stubs, mileage records, and paperwork for any other business costs. You do not normally send this evidence with your tax return, but you must keep it in case HMRC asks for it.
You must usually keep your records for at least 5 years after the 31 January submission deadline for the tax year. For example, if you file your 2024 to 2025 tax return by 31 January 2026, you must normally keep the records until at least the end of January 2031.
Digital records are often much easier to manage than paper files. HMRC is also moving further towards digital record-keeping through Making Tax Digital for Income Tax. Sole traders and landlords with qualifying income over £50,000 in the 2024 to 2025 tax year must start from 6 April 2026. The threshold then reduces to over £30,000 from 6 April 2027, and over £20,000 from 6 April 2028.
FAQs
Can I claim my mobile phone bill?
Yes, but only the business part. If your phone is used for both personal and business reasons, you should work out a fair split and only claim the business use. HMRC expects mixed-use expenses to be apportioned reasonably.
Do I need receipts for every expense?
You should keep evidence for the expenses you claim. That can include receipts, invoices, bank statements, or other records that show what you spent and why it related to the business. HMRC does not usually ask for this when you file, but you must keep it available.
Can I claim for meals?
Only in certain situations. Meals may be allowable if they are part of an overnight business trip. Everyday food or meals that are personal in nature are not usually allowable. Client entertaining is also generally not claimable.
Can I claim training costs?
You can usually claim training that helps you maintain or update existing skills and knowledge used in your current business. Training that is for a new trade or to expand into a new area may not be treated in the same way.
How long should I keep my records?
In most cases, at least 5 years after the 31 January filing deadline for the relevant tax year.
Final thoughts
Self Assessment is much easier when your records are complete, your expenses are sensible, and your evidence is easy to find. You do not need to overcomplicate it, but you do need to be consistent. Claiming too little can cost you money, while claiming too much without proof can create avoidable trouble.
If you want support with your tax return, company accounts, VAT returns, or day-to-day record keeping, contact Asmat & Co Accountants. Getting the basics right now can save you time, stress, and money later.
