Self-Assessment Tax Return Tips: Allowable Expenses UK

Last reviewed: August 2026

Completing a Self Assessment tax return can be straightforward when your income and business expenses have been recorded properly throughout the year.

For self-employed people, allowable business expenses can reduce the taxable profit on which Income Tax is calculated. However, not every expense is automatically allowable, and the correct treatment can depend on the type of expense and how it is used.

HMRC confirms that self-employed people can deduct allowable expenses when calculating taxable profit and should keep records supporting those expenses.

This guide explains some commonly overlooked areas.

What is an allowable business expense?

An allowable business expense is a cost that can be deducted when calculating the taxable profit of your business, where the relevant tax rules allow the deduction.

For example, HMRC’s guidance includes certain costs relating to:

• professional fees

• business premises

• office costs

• equipment

• staff

• business travel

• financial charges

• insurance

The exact rules depend on the expense and your circumstances.

1. Accountancy and professional fees

Professional fees can be allowable when they relate to the business.

HMRC specifically states that self-employed people can claim certain accountancy, legal and other professional fees where they are incurred for business reasons.

However, there are exceptions. For example, HMRC states that the cost of preparing and submitting a Self Assessment tax return is not an allowable business expense for a self-employed person.

This is a good example of why you should not assume that every invoice from a professional adviser receives the same tax treatment.

2. Bank and financial charges

Some business financial costs can be deductible.

HMRC lists examples including:

• business bank charges

• overdraft charges

• business credit card charges

• interest on business loans

• hire purchase interest

• certain leasing payments

Loan repayments themselves are not treated in the same way as interest and may not be deductible as an expense.

3. Office costs

Common office costs can include:

• stationery

• postage

• printing

• printer supplies

• business telephone costs

• business internet costs

• certain software costs

HMRC also explains that the treatment of equipment and software can depend on the accounting method being used.

4. Working from home

If you run your business from home, you may be able to claim certain costs associated with working from home.

HMRC provides specific rules for home-working expenses and also offers simplified expenses for certain circumstances.

Simplified expenses can apply to certain vehicle costs, working from home and living in business premises.

They are available to sole traders and partnerships without companies as partners, but not to limited companies.

You should compare the simplified method with the actual costs to determine which approach is appropriate.

5. Business premises

If you rent business premises, certain costs can potentially be deductible.

HMRC’s guidance includes costs such as:

• rent

• business rates

• utilities

• property insurance

• security

• repairs and maintenance

The precise treatment depends on the circumstances and whether the expenditure is genuinely business-related.

6. Staff costs

If you employ staff, certain employment costs can be allowable business expenses.

HMRC lists examples including:

• salaries

• bonuses

• pensions

• employee benefits

• agency fees

• subcontractors

• employer National Insurance

• qualifying training costs

There are also restrictions, so the exact circumstances should be considered.

7. Business insurance

Business insurance can be an allowable cost where it relates to the business.

Examples may include appropriate business liability insurance and other policies connected with the business.

HMRC specifically lists business insurance among potentially allowable costs for self-employed people.

8. Business travel and vehicles

Travel is an area where business owners need to be particularly careful.

You need to distinguish genuine business journeys from ordinary private journeys.

Depending on your circumstances and accounting method, you may be able to claim actual business costs or use an appropriate simplified method.

Keep records showing the business purpose and relevant mileage or costs.

9. Bad debts

If you use traditional accounting, HMRC allows certain bad debts to be claimed where amounts included in turnover will never be received.

However, the rules are different if you use cash basis accounting because income is generally recorded when it is actually received.

This is an area where choosing the correct accounting method matters.

10. What expenses cannot be claimed?

A common mistake is assuming that anything purchased while running a business is automatically deductible.

Examples of costs that may not qualify include:

• personal expenditure

• private use of business assets

• fines for breaking the law

• costs that are not genuinely connected with the business

HMRC specifically states that fines for breaking the law cannot be claimed as allowable expenses.

Where an expense has both business and personal use, you may need to identify and claim only the appropriate business proportion.

How should you keep records?

Good record keeping is one of the simplest ways to make Self Assessment easier.

Keep:

• sales invoices

• purchase invoices

• receipts

• bank statements

• mileage records

• business expense records

• accounting records

• evidence supporting unusual or significant transactions

HMRC says you should keep proof and records of your expenses even though you generally do not send the evidence with your tax return.

A simple Self Assessment expense checklist

Before submitting your return, consider whether you have reviewed:

• professional fees

• bank charges

• business insurance

• office costs

• software

• business premises

• working-from-home costs

• business travel

• vehicle costs

• staff and subcontractor costs

• relevant equipment

• bad debts where applicable

Do not claim an expense simply because it appears on a checklist. Confirm that the expense is actually allowable in your circumstances.

How Alpha Accountancy can help

Self Assessment becomes much easier when your records are organised throughout the year.

Alpha Accountancy can help self-employed individuals and business owners with:

• Self Assessment tax returns

• bookkeeping

• allowable expense reviews

• tax planning

• accounts preparation

• VAT

• payroll

• ongoing accounting support

If you are unsure whether an expense is allowable, getting advice before submitting your tax return can help you avoid unnecessary mistakes.

Frequently asked questions

What are the most commonly overlooked Self Assessment expenses?

Potentially overlooked areas include professional fees, business banking costs, home-working costs, software, insurance and certain business travel costs. However, each expense must meet the relevant tax rules.

Can I claim my accountant’s fees?

Some accountancy fees can be allowable when they relate to business activities. HMRC’s guidance distinguishes between different types of professional costs, so the nature of the fee matters.

Can I claim working-from-home expenses?

Potentially. HMRC provides both actual-cost rules and simplified expenses for certain self-employed people.

Do I need receipts for Self Assessment?

You should keep appropriate evidence and records supporting your expenses. HMRC says you generally do not submit the proof with your tax return, but you should retain it in case HMRC asks for it.

Can I claim personal expenses through my business?

Generally, personal expenditure is not an allowable business expense. Where something has both business and personal use, the appropriate business proportion may need to be calculated.

Important: This article is general information for UK taxpayers and is not personal tax advice. Tax rules can change and the correct treatment depends on your circumstances. Check current HMRC guidance or speak to a qualified tax professional before making a claim.