How expenses lower your tax
Income tax and Class 4 National Insurance are worked out on your profit: what customers paid you, minus allowable business costs. On a basic-rate profit, every pound of expenses you claim saves about 20% in income tax and 6% in National Insurance.
A cost is allowable if it's for the business. If something is used privately too, such as a van or phone, you claim only the business share.
What you can claim
| Cost | What counts |
|---|---|
| Materials | Stock and materials you use on jobs or sell on, including parts you bill to the customer |
| Tools and equipment | Hand and power tools, ladders, testers, and repairs to them |
| Van and travel | Fuel, insurance, servicing, repairs, vehicle tax, breakdown cover, parking, and travel to customers' sites |
| Workwear | Protective clothing such as safety boots, hard hats and hi-vis, overalls that protect your own clothes, and uniforms with your logo |
| Phone and office | The business share of your phone, broadband, stationery and postage |
| Insurance and fees | Public liability and tools insurance, bank charges, accountant's fees, trade body and scheme fees |
| Marketing | Website, adverts, signwriting on the van, and lead-site fees |
| Training | Courses that keep your existing skills up to date, such as refresher courses |
| Subcontractors | Labour you pay other trades for on your jobs |
What you can't claim
- Travel between home and a permanent workplace, such as your own unit if you go there every day.
- Everyday clothes, even if you only wear them for work.
- Parking fines, speeding fines and other penalties.
- Money you take out of the business for yourself.
- Training for a new trade you don't yet work in.
Van and mileage
You have two ways to claim for a van or car, and you choose per vehicle.
Actual costs. Add up fuel, insurance, servicing, repairs and so on, then claim the business share. If you buy the van, you usually claim its cost through capital allowances rather than as a running cost.
Flat rate per mile. Keep a log of business miles and claim:
| Vehicle | Rate for 2026/27 |
|---|---|
| Cars and goods vehicles, first 10,000 business miles | 55p a mile |
| Cars and goods vehicles, after that | 25p a mile |
| Motorcycles | 24p a mile |
The flat rate covers fuel, insurance, servicing and wear, so you can't claim those as well. Parking and tolls go on top. Once you use the flat rate for a vehicle, you keep using it for as long as that vehicle is in the business.
Working from home
If you do your quotes and paperwork at home, you can claim a flat monthly amount instead of working out a share of your bills: £10 a month for 25 to 50 hours, £18 for 51 to 100 hours, and £26 for more than 100 hours.
Keeping records
Keep receipts, invoices and bank statements for each cost. A separate bank account for the business makes this much easier, and if you join Making Tax Digital you'll need your records in software anyway.
Common questions
Can I claim my van if I also use it at weekends?
Yes, but only the business share. Keep a mileage log so you can show what share of the miles were for work.
Do I need receipts?
Keep records that show what you spent and why: receipts, invoices or bank statements. HMRC can ask to see them for years after you file.
What if my income is tiny?
If your trading income is £1,000 or less a year, you may not need to tell HMRC at all. Above that, you can claim the £1,000 trading allowance instead of expenses if it's worth more to you.
Sources
- Expenses if you're self-employed, GOV.UK. Checked 2 Nov 2026
- Simplified expenses: vehicles, GOV.UK. Checked 2 Nov 2026
- Simplified expenses: working from home, GOV.UK. Checked 2 Nov 2026
- Tax-free allowances on property and trading income, GOV.UK. Checked 2 Nov 2026
Spotted something out of date? Email figures@toolboxmoney.co.uk and we'll check it within two working days.