50 Tax Deductions Every UK Sole Trader Should Know

The Golden Rule

Every deduction here requires the expense to be incurred wholly and exclusively for business. Dual-purpose items can be claimed at the business proportion. Keep evidence for at least five years. For deeper detail on common categories, see our complete expenses guide.

Your Accounted dashboard shows your real-time tax position

Office and Premises Costs

1. Office rent — full cost of dedicated business premises. 2. Business rates — check small business rate relief first. 3. Utilities — electricity, gas, water for business premises. 4. Working from home (flat rate) — £10/month (25–50 hours), £18 (51–100), £26 (101+). 5. Working from home (actual costs) — business proportion of rent/mortgage interest, council tax, utilities, insurance, broadband. Usually saves more than the flat rate. 6. Cleaning and maintenance — for business premises. 7. Office furniture — desks, chairs, shelving. Items under £1,000 usually claimed as revenue expense.

Technology and Communications

8. Computer hardware — laptops, monitors, printers. Business proportion if shared. 9. Software subscriptions — accounting, design, CRM, cloud storage. 10. Mobile phone — business proportion of contract, or full cost of a separate business phone. 11. Broadband — business proportion, or full cost of a separate business connection. 12. Website hosting and domains — hosting fees, domain registration, SSL certificates. 13. Telephone and VoIP — business landline, Zoom/Teams subscriptions.

Travel Expenses

14. Mileage (simplified) — 45p/mile for the first 10,000 business miles, then 25p/mile. Motorcycles: 24p. Bicycles: 20p. Keep a mileage log. 15. Actual vehicle costs — business proportion of fuel, insurance, road tax, MOT, servicing. Must use the same method per vehicle throughout. 16. Public transport — train, bus, Tube for business travel. Commuting excluded. 17. Taxis and ride-hailing — business journeys. Keep receipts. 18. Parking and tolls — during business travel. Fines are never deductible. 19. Accommodation — hotels for genuine business trips. 20. Subsistence — reasonable meals during business travel, additional to normal living costs. 21. Air travel — economy always allowable; business class if justifiable.

Staff Costs

22. Employee salaries — full cost including bonuses and overtime. 23. Employer's National Insurance — remember the £10,500 Employment Allowance. 24. Employer's pension contributions — fully deductible. 25. Subcontractor payments — CIS deduction rules apply in construction. 26. Temporary staff and agency fees — recruitment costs. 27. Staff training — courses relevant to current roles.

Financial Costs

28. Bank charges — monthly fees and transaction charges on business accounts. 29. Payment processing fees — Stripe, PayPal, SumUp merchant fees. 30. Loan interest — capped at £500/year under cash basis; no cap under accrual. 31. Hire purchase interest — the interest element on business asset HP. 32. Accountancy fees — accounts preparation, tax returns, tax advice. 33. Bookkeeping software — Accounted, Xero, QuickBooks subscriptions. 34. Bad debts — under accrual accounting, written-off unpaid invoices.

Marketing and Advertising

35. Online advertising — Google Ads, social media ads, LinkedIn. 36. Print advertising — newspapers, magazines, flyers, brochures. 37. Business cards and stationery — printed branded materials. 38. Website development — design, development, copywriting. Major builds may be capital expenditure. 39. SEO and content marketing — SEO services, content writing, social media management. 40. Networking and events — entry fees for networking events, trade shows, exhibitions.

Professional Development

41. Training courses — must relate to your current trade. A plumber's advanced plumbing course qualifies; a career-change course does not. 42. Professional subscriptions — RICS, RIBA, Law Society, ICB, AAT, trade unions. 43. Books and publications — trade journals and professional reference materials.

Insurance

44. Professional indemnity — essential for consultants and advisers. 45. Public liability — required for many client-facing businesses. 46. Employer's liability — legally required with employees. 47. Business contents — equipment, stock, tools cover. Claim business proportion if under home insurance. 48. Income protection — generally not deductible for sole traders (benefit is personal). "Business expenses insurance" covering overheads may qualify.

Clothing

49. Uniforms and protective clothing — branded uniforms, hard hats, safety boots, high-vis. Ordinary clothing is never deductible even if only worn for work. See our freelancers guide for more. 50. Laundry of work clothing — cleaning costs for deductible work clothing.

Commonly Missed Deductions

From sole traders using Accounted, the most commonly overlooked claims are:

• Working from home (actual costs) — the flat rate is easy but actual costs save far more
• Mileage — forgotten trip logs mean forgotten deductions
• Professional subscriptions — small annual renewals that slip through
• Software subscriptions — modest monthly amounts adding up over the year
• Bank charges — easy to overlook, always deductible

The difference between well-claimed and poorly-claimed returns can easily be £2,000–£5,000 in missed deductions — £400–£1,000 in unnecessary tax at the basic rate.

Related Reading

• National Insurance Calculator for Self-Employed
• Section 24 Explained: How It Affects UK Landlords in 2025/26
• Trivial Benefits for Directors: The £50 Tax-Free Perk Rule

Get Started with Accounted

Penny automatically categorises expenses into correct HMRC categories, ensuring you never miss a legitimate deduction. Combined with WhatsApp receipt capture and real-time tax calculations, Accounted helps you claim everything you're entitled to. Sign up and start your free trial today — no credit card required.

Start Free Trial →

Penny, your AI bookkeeper, tracks your tax position in real time and flags opportunities to reduce your bill. Meet Penny →