Allowable Expenses for Sole Traders

As a sole trader, you can deduct certain business costs from your profit before tax. These are called 'allowable expenses'.

Common Allowable Expenses

• Office costs: Stationery, phone bills, postage.
• Travel costs: Fuel, parking, train or bus fares (for business travel, not commuting).
• Clothing expenses: Uniforms, protective clothing, or costumes for actors/entertainers.
• Staff costs: Salaries, subcontractor costs, agency fees.
• Things you buy to sell: Stock, raw materials.
• Financial costs: Insurance, bank charges, interest on business loans.
• Costs of your business premises: Heating, lighting, business rates.
• Advertising and marketing: Website costs, newspaper ads.

Working from Home

If you work from home, you can claim a proportion of your costs for things like:

• Heating
• Electricity
• Council Tax
• Mortgage interest or rent
• Internet and telephone use

You can either calculate the exact proportion of business use or use simplified expenses (flat rates) if you work 25 hours or more a month from home.