Category 14
Allowable Expenses
You can deduct allowable business expenses from income — they must be wholly and exclusively for trade.
What it is
Allowable expenses reduce your taxable profit. HMRC rules require expenses to be incurred wholly and exclusively for the purposes of your trade or property business. Personal costs are not allowable.
Who it applies to
Self-employed businesses and landlords claiming expenses against rental or trading income.
What you need to do
- Keep receipts and invoices for all business purchases.
- Separate personal and business spending.
- Use simplified expenses only where HMRC allows (e.g. mileage flat rate).
Key points
- Capital items may follow different rules (capital allowances).
- Working from home has specific simplified or actual cost methods.