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Start with the Golden Rule

Every expense you claim has to pass a single test: it must be wholly and exclusively for the purposes of your business. That phrase comes straight from tax law, and it is worth remembering word for word. If you use something partly for yourself and partly for work, the business portion is usually fine to claim — the personal portion is not.

In practice this means a mobile phone used mainly for work, a car driven for deliveries, or a spare room used as an office. It also means keeping a sensible note of how you worked out the split. A reasonable, consistent method is far better than a perfect one you never actually apply.

The second half of the rule is evidence. It is not enough for a cost to be genuine; you need to be able to show it was. Every entry in your accounts should be traceable back to a receipt, invoice, bank statement or mileage log.

Common Expenses You Can Usually Claim

Most everyday running costs of a small business qualify. If you are a sole trader, you will claim these against your profits; if you run a limited company, you will put them through the business accounts. Either way, the list looks similar:

• Office costs — stationery, postage, printing, printer ink, small software subscriptions.
• Travel — train fares, bus tickets, parking, congestion charges and hotel stays for business trips. You can use simplified mileage rates instead of tracking every fuel and repair cost: 45p per mile for the first 10,000 miles in a car or van, then 25p after that.
• Uniforms and protective clothing — including cleaning costs, provided the clothing is required for the job and not ordinary everyday wear.
• Staff costs — wages, employer's National Insurance and pension contributions. Staff entertaining, such as a Christmas meal, is generally allowable too.
• Professional fees — accountancy, bookkeeping, legal advice, professional subscriptions and indemnity insurance.
• Marketing — website hosting, domain names, advertising, printed leaflets.
• Financial costs — bank charges on a business account, business insurance, and interest on business loans.
• Training — courses that update or refresh skills you already use in the business.

The Tricky Ones: What You Cannot Claim

Some costs catch people out. Client entertaining — taking a customer to lunch, buying them a gift, footing the bill for a day at the races — is not allowable. Ordinary clothing that you could wear anywhere is not allowable, even if you only ever wear it to work. Fines and penalties, including parking tickets and late filing charges, are never deductible.

Training is a grey area. Learning a brand new trade or profession is generally treated as capital or personal, not as a business expense. Updating existing skills is fine.

Then there is equipment. A laptop, a van or a set of tools usually counts as a capital asset rather than an ordinary expense. You often still get relief, but through capital allowances instead. Many small purchases qualify for the annual investment allowance, which lets you deduct the full cost in the year you buy. It is worth checking the current threshold before you assume an item is simply an expense.

If you work from home, do not simply claim a share of your broadband or council tax without thinking it through. Either use a fair proportion of your actual household bills, or use simplified flat rates — currently £10, £18 or £26 a month depending on how many hours you work from home.

Keep Evidence That Would Satisfy a Check

Ask yourself a simple question: if someone reviewed your records, could you explain this purchase in one sentence? If the answer is no, the entry is not ready.

At minimum, keep:

• Receipts and invoices for everything over a small threshold, and ideally for everything at all.
• Bank statements that match your recorded payments.
• Mileage logs showing date, destination, purpose and miles driven.
• Notes on mixed-use items, explaining how you calculated the business share.

Digital copies are perfectly acceptable. Photograph a paper receipt the moment you get it, and let it sync to a folder or app you actually use. Records need to be kept for around six years after the 31 January filing deadline for the relevant tax year, so a tidy system now saves a painful scramble later.

Simple Bookkeeping Habits That Keep You Claim-Ready

Good bookkeeping is not about spreadsheets so beautiful nobody dares touch them. It is about small habits, repeated.

• Separate your money. A dedicated business bank account means you never have to guess which transactions were personal.
• Log expenses weekly. Fifteen minutes every Friday beats a lost weekend every January.
• Write a purpose note. "Client meeting, Manchester" tells a far better story than "Train — £84".
• Reconcile monthly. Match your records to your bank statement so nothing drifts.
• Review before filing. Glance through your expense categories and ask whether each one would survive a polite question.

Do this consistently and claiming expenses becomes a calm, boring routine rather than a source of dread. You will claim what you are genuinely owed, skip what you are not, and sleep perfectly well if anyone ever asks to see the paperwork.