On a UK Self Assessment tax return, you can claim the running costs of your self-employment or rental business, capital allowances on equipment you buy, contributions to your pension, and a handful of specific reliefs that reduce either your taxable income or your final tax bill. The rule underneath all of it is simple: every business expense must have been incurred wholly and exclusively to earn that business income. Anything with a personal element fails the test, and HMRC applies it strictly.
What follows is a working list of what actually goes on the return, organised by the kind of income you are reporting.
The Wholly and Exclusively Test
Section 34 of the Income Tax (Trading and Other Income) Act 2005 sets the standard every claim has to meet.1Legislation.gov.uk. Income Tax (Trading and Other Income) Act 2005 If the sole reason you spent the money was to earn business income, the cost is allowable. If any part of the purpose was personal, it fails.2HM Revenue & Customs. BIM37007 – Wholly and Exclusively: Overview
A laptop bought solely for client work qualifies in full. A laptop you also use to stream films needs to be apportioned, and you can only claim the business share. This is the single most common reason HMRC disallows deductions, so when in doubt, ask yourself whether you would have spent the money if the business did not exist.
Everyday Running Costs
Most of the day-to-day expenses of running a business are deductible as long as they meet the wholly and exclusively test. These are revenue costs, meaning things you use up or pay for regularly rather than assets you keep for years.
- Office and supplies: stationery, printer ink, postage, software subscriptions, and phone bills used for work.
- Marketing: website hosting, online advertising, business cards, and print materials promoting the business.
- Stock and raw materials: anything bought for resale or used in production, fully deductible against income.
- Professional fees: accountant fees for preparing the return, solicitor costs relating to your trade, and subscriptions to professional bodies relevant to your work.
- Insurance: business policies such as public liability or professional indemnity cover.
Work Clothing
Everyday clothing is not deductible, even if you wear it only for work. HMRC draws a firm line: only genuinely protective clothing worn out of physical necessity qualifies, such as overalls, safety boots, hard hats, and protective gloves.3HM Revenue & Customs. EIM32470 – Other Expenses: Clothing: Protective Clothing A suit bought for client meetings does not qualify. Uniforms with a permanent business logo, of a kind you would not wear outside work, can also qualify.
Training and Professional Development
Training that updates or expands skills you already use in your existing business is generally allowable. A freelance web designer taking a course on AI tools, or a plumber learning bookkeeping to manage their own accounts, can both claim the cost.4GOV.UK. Check if the Cost of Training Could Be an Allowable Business Expense A course that helps you start a completely new and unrelated business is not deductible against your existing one, and a qualification pursued mainly out of personal interest will not qualify either.
Travel and Vehicle Costs
Travel to visit clients, attend trade events, or collect supplies is deductible. Ordinary commuting between home and a regular place of work is not.5HM Revenue & Customs. Ordinary Commuting and Private Travel (490: Chapter 3) If you work from home and drive to a client site, that journey qualifies. If you rent an office and drive there each morning, it does not.
Most self-employed people use the simplified flat mileage rates rather than tracking actual running costs. The rates for 2026-2027 are:
- Cars and vans: 45p per mile for the first 10,000 business miles, then 25p per mile.
- Motorcycles: 24p per mile.
- Bicycles: 20p per mile.
These flat rates already cover fuel, insurance, repairs, and servicing, so you cannot claim those costs separately on top.6GOV.UK. Simplified Expenses if You’re Self-Employed: Vehicles The alternative is to calculate actual vehicle costs and claim the business-use proportion, but once you pick the flat rate for a particular vehicle, you must stick with it for as long as you use that vehicle in the business. Keep a mileage log with the date, destination, and purpose of every business trip.
Working From Home
If you run your business from home, a share of your household running costs is claimable. There are two methods.
Simplified Flat Rate
The flat rate avoids any calculation of actual bills. You count the hours per month you work from home and claim a fixed amount:7GOV.UK. Simplified Expenses if You’re Self-Employed: Working From Home
- 25 to 50 hours per month: £10
- 51 to 100 hours per month: £18
- 101 or more hours per month: £26
At the top rate, that comes to £312 a year. It is simple and hard for HMRC to challenge, but often less than you would get by working out actual costs.
Actual Costs Method
You add up costs like heating, electricity, water, council tax, and broadband, then work out the share that relates to business use. A common approach is to divide by the number of rooms in the home and by the proportion of time the workspace is used for work. Use one of five rooms exclusively during working hours and you would claim roughly one-fifth of eligible bills for those hours. The calculation takes more effort and you need to keep every household bill, but it usually produces a larger deduction for anyone working from home regularly.
Capital Allowances for Equipment
Equipment, tools, vehicles, and machinery your business will use for more than a year are capital purchases, not running costs. Instead of deducting them as expenses, you claim capital allowances.
The Annual Investment Allowance lets you deduct the full cost of qualifying plant and machinery up to £1,000,000 per year.8GOV.UK. Claim Capital Allowances: Annual Investment Allowance For most sole traders that cap is effectively unlimited. A new van, a professional camera, workshop machinery, or a computer all qualify, and the allowance is claimed on the self-employment pages of your return.
Older assets still in use that were not fully covered by the AIA go into a pool, and you claim Writing Down Allowances each year at 18% of the remaining value for most assets, or 6% for certain long-life assets and integral building features. These reduce your taxable profit in the same way revenue expenses do.
Expenses for Rental Properties
Landlords report rental income through Self Assessment and can deduct the costs of maintaining and managing their properties. The line between a repair and an improvement matters more than any other distinction on the property return.
Repairs vs. Improvements
Fixing a broken boiler, repairing a leaking roof, or repainting a room restores the property to its previous state. These are revenue expenses, deductible in full against rental income. Replacing a standard kitchen with a higher-spec one, adding an extension, or converting a loft adds value or new functionality. HMRC treats those as capital improvements, which cannot be deducted from rental income but may reduce your Capital Gains Tax bill when you sell the property.
Replacement of Domestic Items
When you replace furniture or appliances in a let property, you can claim the cost under Replacement of Domestic Items relief. This covers sofas, beds, curtains, fridges, washing machines, and similar items provided for tenants.9HM Revenue & Customs. PIM3210 – Furnished Lettings: Replacement of Domestic Items Relief: 2016-17 Onwards The relief only covers the replacement cost of an equivalent item, not the original purchase when you first furnish a property. If you upgrade, you can only claim what an equivalent replacement would have cost, and any money received for the old item reduces the claim.
Mortgage Interest Is No Longer a Direct Deduction
Residential landlords can no longer deduct mortgage interest and finance costs from rental income. Since 2020-2021, the full amount of finance costs is given as a 20% basic rate tax credit instead.10GOV.UK. Tax Relief for Residential Landlords: How It’s Worked Out For basic rate taxpayers the effect is the same, but higher and additional rate landlords end up with a larger bill than they used to. You still enter the finance costs on the return; the system applies them as a tax reduction rather than an income deduction.
Other Landlord Costs
Beyond repairs and furnishings, landlords can deduct letting agent fees, landlord insurance premiums, legal costs for drafting tenancy agreements or pursuing rent arrears, ground rent and service charges on leasehold properties, and advertising costs to find tenants.
The Trading and Property Allowances
If you earn small amounts from self-employment or property, you may not need to claim expenses at all. There is a £1,000 Trading Allowance and a separate £1,000 Property Allowance.11GOV.UK. Tax-Free Allowances on Property and Trading Income If your gross income from either source stays at or below £1,000 in a tax year, you generally do not need to tell HMRC about it. Above £1,000, you can still use the allowance as a flat £1,000 deduction instead of claiming actual expenses, but you cannot do both. Work it out both ways and use whichever gives the larger deduction.
Pension Contributions
Pension contributions do not appear in the expenses section, but they still belong on the return. You can contribute up to £60,000 per year, or 100% of your earnings if lower, and receive tax relief on the full amount.
If you pay into a personal pension, the provider typically claims basic rate relief of 20% from HMRC and adds it to your pension pot. Higher and additional rate taxpayers claim the extra relief through Self Assessment by entering the contributions in the relevant section; the system then adjusts your tax bands. This is one of the most overlooked reliefs on the return.
Cash Basis or Accruals
How you claim expenses depends on which accounting method you use. From 2024-2025 onwards, the cash basis is the default for self-employment.12GOV.UK. Expanding the Income Tax Cash Basis for Self-Employed Individuals and Partnerships Under cash basis, income is recorded when received and expenses when paid. The old turnover limits have been removed, so businesses of any size can use it.
Accruals accounting records income when earned and expenses when incurred, regardless of when money moves. You can elect to use accruals if it suits your business, which some prefer if they carry large amounts of stock or have complex timing between invoicing and payment. Two restrictions that used to penalise cash basis users have been lifted: the old £500 cap on interest deductions is gone, and losses under cash basis can now be set against other income or carried back to earlier years.
Records You Need to Support What You Claim
Every expense on the return needs to be backed by evidence: receipts, invoices, and bank statements showing the date, amount, and business purpose. For vehicle costs, that means a mileage log with the destination and reason for each trip. Group your records into categories as you go rather than facing a box of unsorted paper in January.
Self-employed people report income and expenses on supplementary pages attached to the main SA100. If turnover is below the VAT threshold, use the short version (SA103S); if above, use the full version (SA103F).13GOV.UK. Self Assessment: Self-Employment (Short) (SA103S) Landlords report rental income on form SA105.14GOV.UK. Self Assessment: UK Property (SA105) HMRC can ask to see your records at any time, and you must keep them for at least five years after the 31 January filing deadline for the relevant tax year.