You pay tax on your profit, so every allowable expense reduces your bill. The test is whether the cost is wholly and exclusively for the business.
Common allowable costs
- Stock, materials and goods for resale
- Business travel, vehicle running costs or mileage
- Phone, broadband and software
- Accountancy, insurance and bank charges
- A share of household bills if you work from home
Costs you can’t claim
- Clothing that isn’t uniform or protective
- Normal commuting
- Entertaining clients
- Fines and penalties
The trading allowance
Instead of claiming actual expenses, you can deduct a flat £1,000. It only helps if your real costs are lower than that.
We check your expenses as part of our Self Assessment tax return service, and our bookkeeping service keeps the records in order through the year.
