Business expenses allow many self-employed people to reduce their tax bill each year by claiming back costs that are essential to running their business. While most people are familiar with things like equipment or insurance, there are several lesser-known expenses that are often missed.

Here are five business expenses you might not realise you can claim, along with how to stay within HMRC guidelines.

Mobile phone costs for business use

If you use your personal mobile phone for work, you can claim a proportion of your bill as an allowable expense.

The key point is that you can only claim the business-use portion. This needs to be a reasonable estimate that you can justify if required.

In practice:

• You should work out roughly how much of your usage is for business
• Apply that percentage to your total bill
• Keep records to support your calculation if needed

For example, if around 40% of your phone use is for work, you can claim 40% of your monthly bill, including calls, texts and data.

If you have a separate phone contract used only for business, that cost is usually fully allowable.

Working from home expenses

If you run your business from home, you may be able to claim a portion of your household costs. This is one of the most commonly missed opportunities.

There are two main ways to calculate your claim.

Simplified expenses method

HMRC allows you to claim a flat monthly rate based on how many hours you work from home. This is the simplest option and does not require detailed calculations.

Actual cost method

You can also claim a proportion of your actual household expenses, based on business use. These may include:

• Electricity and heating
• Broadband
• Rent or mortgage interest
• Council tax

You must only claim the business-use portion. This is usually worked out based on how much time and space your business takes up in your home.

Choosing the right method can make a noticeable difference to your tax bill. If you are unsure, speaking to accountants in Oxfordshire can help ensure everything is calculated correctly.

Business travel and accommodation

Travel costs are allowable when they are incurred for business purposes and are not part of your normal commute.

Allowable expenses include:

• Fuel costs or mileage using HMRC approved rates
• Train, bus or taxi fares
• Parking fees and tolls
• Hotel accommodation for overnight business trips

The key rule is that the journey must be wholly and exclusively for business.

You cannot claim:

• Travel between your home and a regular place of work
• Personal trips, even if there is some business activity involved

For example, travelling to meet a client or attend a temporary work location would qualify. Daily commuting would not.

If your trip requires an overnight stay, the accommodation should be reasonable and appropriate for the purpose of the visit.

Training and professional development

Training can be claimed as a business expense, but only when it directly relates to your existing work.

HMRC allows you to claim training costs if they are used to maintain or improve your current skills. You cannot claim training that helps you move into a completely new line of work.

For example:

• A graphic designer taking an advanced design course would be allowable
• A graphic designer training to become a personal trainer would not

Allowable costs may include:

• Course fees
• Books and materials
• Online subscriptions related to your trade

This is an area where mistakes are common, so it is important to be clear on the purpose of the training before making a claim.

If you need help reviewing your expenses, support with self-employed tax returns can help ensure everything is accurate and compliant.

Alternatively see our top tips on self-assessment tax return.

Meals and subsistence costs

Food and drink are only allowable in specific situations, and this is often misunderstood.

You cannot claim meals that are part of your normal daily routine.

However, you can claim subsistence costs when they are necessary for business travel. This includes:

• Meals during a business trip
• Food purchased while attending a conference
• Costs incurred during overnight stays

What you cannot claim:

• Everyday meals while working from home or at your usual place of work
• Client entertainment, such as taking someone out for lunch or dinner

Even if entertaining clients feels like a business expense, HMRC does not allow this as a deductible cost.

Bonus Tip: Other commonly missed business expenses

Alongside the main categories above, there are several smaller expenses that are often overlooked but can add up over time.

Professional fees and subscriptions

You can claim memberships and subscriptions that are directly related to your business or industry.

Broadband and internet use

If you use your home internet for work, you can claim a proportion of the cost based on business use.

Bank charges

Fees on your business bank account or transaction charges are usually allowable.

Insurance

Business-related insurance policies such as public liability or professional indemnity insurance can be claimed in full if they are solely for business use.

Office supplies

Everyday items such as stationery, printer ink and postage costs are all allowable when used for your business.

Individually these may seem small, but together they can make a noticeable difference to your overall tax position.

Need help making sure you are claiming everything correctly?

Understanding what you can and cannot claim is essential if you want to avoid overpaying tax or running into issues with HMRC.

If you are unsure about your expenses or want a second opinion, our team of accountants can review your situation and highlight opportunities you may have missed.

Contact our accountants for immediate support.

FAQs

What does wholly and exclusively mean for business expenses?

It means the expense must be only for business purposes. If there is any personal use, you can usually only claim the business portion.

Do I need receipts for all expenses?

Yes, you should keep records such as receipts, invoices or bank statements to support your claims in case HMRC asks for evidence.

Can I claim expenses if my business is not profitable yet?

Yes, you can still claim allowable expenses as long as they are genuine and related to your business activities.

Should I use simplified expenses or actual costs?

It depends on your situation. Simplified expenses are easier, but actual costs may result in a larger claim if your household expenses are high.

What happens if I claim something incorrectly?

You may need to repay tax and could face penalties. Getting professional advice can help reduce this risk.