Allowable Expenses for the Self-Employed: What You Can Claim in 2026/27

Last updated 12 June 2026

What expenses can you claim if you're self-employed?

You can claim any cost incurred wholly and exclusively for running your business, and HMRC sorts the common ones into nine categories. If something has both business and personal use — a mobile phone, for example — you claim only the business share: gov.uk's own example is claiming £70 of a £200 phone bill where £70 relates to business calls.

The same rules apply whether you run a full-time business or a side hustle — a Deliveroo rider's insulated bag and an accountant's professional software both pass the same test. If you have just started out, our guide to registering as a sole trader covers the set-up steps that come before your first expense claim.

How much tax do allowable expenses actually save?

Expenses reduce your taxable profit pound for pound, and profit is what both Income Tax and Class 4 National Insurance are charged on. For a basic-rate sole trader in 2026/27, each £1 of allowable expenses saves about 26p — 20p of Income Tax plus 6p of Class 4 NI. Here is gov.uk's example of £40,000 turnover with £10,000 of expenses, taken through to the tax bill:

Claiming the £10,000 of genuine costs cuts the bill by £2,600. Class 2 NI adds nothing either way in 2026/27: it costs £0 and counts as paid once profit reaches £7,105. Run your own figures through our sole trader tax calculator, or see how the bands stack up in our guide to the 2026/27 tax bands and National Insurance classes explained.

What is the self-employed mileage rate for 2026/27?

The simplified-expenses flat rate for cars and goods vehicles is 55p per mile for the first 10,000 business miles in 2026/27, then 25p per mile after that. The 55p rate took effect on 6 April 2026 — the first increase from the 45p rate that had applied since 2011. Motorcycles are unchanged at 24p per mile.

The flat rate replaces claiming the actual costs of running the vehicle, so you do not separately deduct fuel, insurance, servicing or capital allowances for it. Example: 12,000 business miles in 2026/27 gives a deduction of £6,000 (10,000 × 55p + 2,000 × 25p). Three rules to watch:

• Once you use the flat rate for a vehicle, you must keep using it for as long as that vehicle is in the business.
• You cannot use it for a vehicle whose cost you have already claimed — for example as a capital allowance or as a cash-basis purchase.
• Parking and other travel costs, such as train journeys, can still be claimed on top.

Mileage is usually the single biggest claim for delivery and rideshare drivers — our Uber driver and Deliveroo tax calculators build the 55p/25p rates in for you.

How much can you claim for working from home?

If you work from home 25 hours or more a month, you can use a monthly flat rate instead of apportioning household bills. The rates depend on your business hours at home:

The flat rate does not cover telephone or internet costs — you claim the business proportion of those bills separately, based on actual use. The alternative is to claim a fair proportion of actual household running costs (heating, electricity and so on) based on the space and time used for business; that takes more record-keeping but can produce a bigger claim. Note these are the rules for the self-employed — employees have a different scheme, covered in our working-from-home tax relief guide.

What can't you claim?

The most common refused claims fail the "wholly and exclusively" test. You cannot claim:

• Money taken from the business for personal use — drawings are not an expense.
• Everyday clothing, even if you only wear it for work; uniforms and protective clothing are the exception.
• The personal share of mixed-use costs — only the business proportion is allowable.
• Training to start a new, unrelated business — allowable training updates skills you already use in the trade.
• Expenses alongside the trading allowance. The £1,000 trading allowance is an alternative to claiming costs: if your actual expenses are over £1,000, claim the expenses; if they are under, the allowance usually wins. You cannot claim capital allowances while using it either.

What records do you need to keep — and for how long?

You must keep records of all business income and expenses — invoices, receipts and bank statements — for at least 5 years after the 31 January submission deadline of the relevant tax year. The 2026/27 return is due by 31 January 2028, so its records need to survive until at least the end of January 2033. File more than 4 years late and a further 15-month retention rule applies from when you send the return.

From 6 April 2026, record-keeping also went digital for many sole traders. Under Making Tax Digital for Income Tax, anyone whose gross self-employment and property income was over £50,000 on their 2024–25 return must keep digital records in compatible software and send HMRC cumulative quarterly updates, with standard deadlines of 7 August, 7 November, 7 February and 7 May. The threshold falls to £30,000 from April 2027 and £20,000 from April 2028. Check whether you are in scope with our MTD qualifying income checker, map your filing dates with the quarterly deadline calculator, or read the full Making Tax Digital guide. Either way, the discipline pays for itself: tidy records are what let you claim every allowable penny across all our free UK tax calculators.

Frequently asked questions

Sources: Expenses if you're self-employed (gov.uk), Simplified expenses if you're self-employed (gov.uk) and Business records if you're self-employed (gov.uk), verified 12 June 2026. Estimates for information only — not regulated tax advice.