Sole Trader in the UK? Don’t Miss Out on These Tax Claims

Written By Katherine Thorburn

Sole Trader in the UK? Don’t Miss Out on These Tax Claims

Being your own boss is empowering — but managing your own taxes? That can feel overwhelming. If you're a sole trader in the UK, you might be entitled to more tax relief than you realise.

At TAXGPT, we believe tax advice should be clear, practical, and built for real people running real businesses. Here’s a guide to common allowable expenses you might be missing out on — and how to claim them with confidence.

What Are Allowable Expenses?

Allowable expenses are business-related costs that you can deduct from your income when working out how much profit you need to pay tax on. In short, they reduce your taxable income — and your tax bill.

The key rule? They must be wholly and exclusively for the purpose of running your business.

Here are some of the most commonly claimed (and often overlooked) expenses.

Home Office Costs

If you work from home, you can claim a proportion of your household bills — or you can use HMRC’s flat rate system, which offers a simple alternative based on the number of hours you work from home each month.

This might include a portion of your:

  • Electricity

  • Gas

  • Council tax

  • Rent (note: not mortgage payments)

Using the flat rate avoids the need to work out percentages for each bill, making things simpler and faster.

Travel Expenses

Travel for business purposes can be claimed, including:

  • Business mileage in your own vehicle (using HMRC’s mileage rates)

  • Public transport fares

  • Parking fees

  • Taxis, if necessary for business activities

Note that commuting to and from your usual place of work doesn’t count — the journey must be a business-related trip.

Software and Subscriptions

Many sole traders rely on digital tools to run their businesses efficiently. If you’re using software that supports your operations, the costs are usually allowable. This includes:

  • Design tools like Canva

  • Video conferencing software like Zoom

  • Bookkeeping apps like Xero or QuickBooks

  • Project management platforms

As long as the software is used for business purposes, it can typically be claimed.

Phone and Internet Bills

If you use your phone and internet for both personal and business use, you can claim a reasonable percentage of the costs that relate to your business activity.

For example, if 50% of your mobile usage is for work, you can claim half of your bill.

Make sure your calculation is realistic — HMRC may ask how you worked it out.

Marketing and Advertising

Anything you spend to promote your business can often be claimed as a marketing expense. That includes:

  • Website domain and hosting

  • Social media advertising

  • Email marketing tools

  • Design and branding costs

  • Business cards and promotional flyers

Marketing is a crucial business cost — and an allowable one.

Training and Courses

If you’re taking a course or attending a workshop to improve your skills directly related to your current business, the cost can usually be claimed.

Examples include:

  • Updating your knowledge on legislation in your field

  • Learning new software for your business

  • Skills refreshers

However, training that helps you start a new business or switch careers is not allowable.

Professional Fees

You can claim for professional services that help you run your business. That includes:

  • Accountant fees

  • Legal advice for business matters

  • Membership fees for professional associations (as long as they are on HMRC’s approved list)

These are often overlooked but can make a significant difference when added up over the year.

The Importance of Record-Keeping

Claiming is only part of the story. HMRC expects you to keep accurate records of all your expenses — that means:

  • Receipts and invoices

  • Mileage logs

  • Bank statements

  • Notes on how you calculated business-use percentages

Use accounting software or a simple spreadsheet system to stay organised. Keeping detailed records isn’t just about compliance — it also gives you clarity over your finances.

Need Tax Made Simple?

TAXGPT is your virtual tax assistant — built specifically for UK sole traders, freelancers, and small business owners.

It helps you identify what you can claim, how to claim it, and where you might be missing out — all without jargon or guesswork.

Whether you’re just starting out or looking to optimise your existing business, TAXGPT is the AI-powered support system that makes tax simple, fast, and reliable.

Find out what you could be claiming. Ask TAXGPT today.

 
Katherine Thorburn