Information block 14 of 20
Allowable Expenses
Allowable expenses reduce taxable profit but must be incurred wholly and exclusively for business. Personal costs, fines, and most entertainment are not allowable.
- Keep receipts for every business purchase you claim
- Simplified expenses available for mileage, home, and flat-rate costs
- Capital items may use capital allowances instead
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.
Working-from-home claims can use simplified rates or actual costs. Clothing is only allowable if specialist or branded uniform required for work. Client entertaining is generally not deductible against trading profit.
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.
Common mistakes to avoid
- Claiming full mobile or internet bills without business-use percentage
- Treating vehicle purchase as a revenue expense in year one
- Claiming personal groceries or meals without business travel rules
How SelfSubmit helps
SelfSubmit profession templates list common allowable lines for your trade — for example meter takings, tools, and mileage — covering frequent expense categories for that work.