Interior Designers — Freelance Tax and Expenses Guide

Freelance interior design is a brilliant career for creative people who want autonomy over their work and clients. But alongside mood boards and material samples, you also need to manage invoices, track expenses, and file tax returns. The good news is that interior designers can claim a generous range of business expenses — from software subscriptions and client meetings to travel and home office costs.

This guide covers the tax essentials for self-employed interior designers in the UK, with the correct figures for the 2025/26 tax year.

Registering as a Self-Employed Designer

If your freelance interior design income exceeds £1,000 in a tax year, you need to register as self-employed with HMRC. This applies whether design is your full-time business or a side project alongside employment.

Register by 5 October following the end of the tax year in which you started trading. Once registered, you'll receive a UTR (Unique Taxpayer Reference) number and will need to file a Self Assessment tax return each year.

Many interior designers start by taking on a few projects through word of mouth or social media and don't realise they've crossed the £1,000 threshold. It's worth keeping track from the outset — even informal commissions from friends or family count as business income if you're being paid for your design expertise.

The distinction between employment and self-employment matters here, too. If you work for a single design studio that controls when, where, and how you work, HMRC might consider you to be employed rather than self-employed. Genuine freelance interior designers typically set their own rates, work for multiple clients, control their own schedule, and use their own equipment.

Understanding Your Tax Bill

As a sole trader, you're taxed on your profits — that's your total design income minus your allowable business expenses. For the 2025/26 tax year:

• Personal allowance: £12,570 — no Income Tax on the first £12,570
• Basic rate: 20% on taxable profits between £12,570 and £50,270
• Higher rate: 40% between £50,270 and £125,140
• Additional rate: 45% above £125,140

On top of Income Tax, you'll pay National Insurance. Class 2 NICs are £3.45 per week when profits exceed £12,570. Class 4 NICs are 6% on profits between £12,570 and £50,270, then 2% above that. For the full picture, see our National Insurance for sole traders guide.

If your turnover reaches £90,000, you'll need to register for VAT. Some interior designers, particularly those working on high-end residential or commercial projects, hit this threshold relatively quickly. Others voluntarily register to reclaim VAT on purchases. Our VAT registration threshold guide explains the considerations.

Expenses You Can Claim

This is where interior designers can really benefit. The creative nature of the work means there's a long list of legitimate business expenses. Here's what you can typically claim:

Software and subscriptions:

• Design software (AutoCAD, SketchUp, Revit, Adobe Creative Suite)
• 3D rendering and visualisation tools
• Project management software (Asana, Trello, Monday.com)
• Colour-matching and palette tools
• Online material and fabric libraries
• Cloud storage and file-sharing services

Equipment and technology:

• Laptop or desktop computer
• Monitor, tablet, or iPad (if used for design work)
• Printer, scanner, and plotter
• Camera for site photography
• External hard drives and backup equipment

Materials and samples:

• Sample books, fabric swatches, and material samples
• Colour charts and paint samples
• Mood board materials
• Presentation boards and display materials
• Model-making supplies

Professional development:

• CPD courses and design workshops
• Industry conferences and trade shows (Grand Designs Live, Decorex, etc.)
• Professional memberships (British Institute of Interior Design, Society of British and International Design, etc.)
• Design books, magazines, and journals

Client-facing costs:

• Printing and binding presentations, proposals, and design packs
• Meeting room hire
• Client entertainment (limited — HMRC restricts this, but small costs like coffee at a client meeting are generally fine)
• Portfolio website hosting and design

Travel:

• Mileage to client sites, showrooms, and suppliers (45p per mile for the first 10,000 business miles, then 25p)
• Or actual vehicle running costs
• Public transport to meetings and site visits
• Parking and congestion charges
• Overnight accommodation for distant projects

Insurance:

• Professional indemnity insurance (essential — protects you if a client claims your advice caused them a loss)
• Public liability insurance
• Contents insurance for business equipment

Home office:

• A proportion of household costs if you work from home (more on this below)
• Dedicated office furniture: desk, chair, shelving, storage
• Broadband and phone (business proportion)

For the comprehensive list, check out our sole trader expenses guide.

Working from Home

Many freelance interior designers work from a home studio or office for at least part of their time — designing, creating presentations, managing admin, and communicating with clients. You can claim a proportion of your home costs for this.

Simplified expenses (flat rate):

• 25–50 hours per month: £10
• 51–100 hours: £18
• 101+ hours: £26

Actual costs method: Work out the proportion of your home dedicated to business use (e.g., one room out of five = 20%) and claim that share of rent or mortgage interest, council tax, utilities, broadband, and insurance.

If you have a dedicated studio or office room, the actual costs method often gives a larger deduction. But be aware that exclusive business use of a room could have capital gains tax implications if you sell your home, so many designers use the room for personal purposes too (even if only occasionally) to avoid this issue.

Managing Project-Based Income

Interior design work is typically project-based, which means your income can be lumpy — a large fee for a residential project, followed by a quiet period while you pitch for new work. This has practical implications:

Invoice promptly and clearly. When a project milestone is reached, send the invoice immediately. Include your name, UTR number, a description of the work completed, the amount, and payment terms. Slow invoicing leads to slow payment.

Use stage payments. For larger projects, agree a payment schedule upfront — a deposit or design fee at the start, progress payments at key milestones, and a final balance on completion. This smooths your cash flow and reduces the risk of a client disappearing without paying.

Chase late payments. Interior design clients — particularly private residential clients — can be slow payers. Have a clear follow-up process: a polite reminder at 7 days overdue, a firmer chase at 14 days, and a final notice at 30 days. You can charge statutory interest on late commercial payments (8% plus the Bank of England base rate).

Set money aside for tax. With project-based income, it's easy to spend a large fee and then struggle when the tax bill arrives. Transfer 25-30% of every payment into a savings account designated for tax. Don't touch it until your Self Assessment is filed and paid.

Accounted makes managing project income straightforward. You can track invoices, log payments, and monitor your cash position in real time. Penny, our AI bookkeeping assistant, can alert you to overdue invoices and help you stay on top of your finances between projects.

Purchasing on Behalf of Clients

Many interior designers purchase furniture, materials, and fittings on behalf of their clients. How this works from a tax perspective depends on the arrangement:

If you buy items and resell them to the client: The income from selling the items is part of your turnover, and the cost of purchasing them is a business expense. The profit on the items is taxable.

If you act as an agent: The client pays the supplier directly (or reimburses you at cost), and you charge a separate design fee or commission. In this case, the reimbursed amount isn't part of your turnover because you're acting as an intermediary.

The distinction matters, especially for VAT. If you're reselling items, they count towards your turnover and could push you over the £90,000 VAT threshold. If you're acting as an agent and passing costs through at cost, they don't. Get this right from the start, and keep clear records of which model you're using for each project.

Record-Keeping and Going Digital

HMRC requires records to be kept for at least five years. For interior designers, this means:

• Invoices issued to every client
• Receipts for all business expenses (software, materials, travel, etc.)
• Bank statements showing business transactions
• Records of purchases made on behalf of clients
• Mileage logs
• Contracts and project proposals

With Making Tax Digital for Income Tax launching from April 2026 for those earning over £50,000, digital record-keeping is becoming mandatory. Accounted is purpose-built for UK sole traders and handles everything from expense tracking to MTD submissions. Penny keeps your records categorised and up to date, so you spend your time designing rather than doing admin.

Building a Financially Healthy Design Practice

A few broader tips to keep your freelance interior design business on a sound financial footing:

• Separate business and personal finances. A dedicated business bank account is essential for clean bookkeeping and professional credibility.
• Price your time properly. Factor in not just the hours spent designing but also client meetings, site visits, admin, marketing, and professional development. Many designers undercharge because they only price the "creative" hours.
• Build a pipeline. Don't wait until a project ends to look for the next one. Consistent marketing — whether through Instagram, a portfolio website, networking events, or referrals — keeps work flowing.
• Invest in professional insurance. Professional indemnity insurance is essential for interior designers. If a client claims your design advice led to a financial loss (say, a material that didn't perform as expected), you need protection.
• Review your expenses quarterly. Are you still using all those software subscriptions? Has your insurance been renewed at a competitive rate? Regular reviews keep costs in check and ensure you're claiming everything you're entitled to.

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Related reading:

• Sole Trader Expenses — The Complete List
• How to Register as Self-Employed with HMRC
• How Much Tax Will I Pay as a Sole Trader?

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