Allowable expenses for sole traders
Short answer: Sole traders can deduct costs incurred wholly and exclusively for the business, such as office costs, business travel, stock, staff, premises, marketing and financial costs. Alternatively use simplified expenses, or the £1,000 trading allowance instead of actual expenses.
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General information, not tax or financial advice. Check GOV.UK or speak to a qualified adviser about your own situation.
Common categories: office costs, travel (not commuting), clothing (uniforms only), staff, stock, financial costs, premises, marketing, and training related to your current business. Instead of actual costs you can use simplified expenses: 55p a mile for the first 10,000 business miles in 2026/27 (45p before 6 April 2026), then 25p, plus flat-rate working-from-home allowances. Or you can claim the £1,000 trading allowance instead of expenses.
Frequently asked questions
What expenses can sole traders claim?
Costs incurred wholly and exclusively for the business: office costs, business travel (not commuting), uniforms, staff, stock, financial costs, premises, marketing and training for your current business.
What is the trading allowance?
Your first £1,000 of self-employment income is tax-free. You can claim it instead of your actual expenses, but not both.
Can I use flat rates instead of actual costs?
Yes, simplified expenses cover vehicles (55p a mile for the first 10,000 miles in 2026/27), working from home and living at your business premises.