What Expenses Can I Claim As a Freelancer?
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Business expenses
6
January 2022

What Expenses Can I Claim As a Freelancer?

When you’re self-employed, you can deduct a wide range of business-related costs from your taxable profit. Here’s a handy list of the most common things you can claim for as "allowable expenses".

Aaron Beardmore
Aaron Beardmore
Product Manager at Coconut
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Allowable expenses

It would be lovely to expense school fees and your brand new Fender Strat – but a good rule of thumb when claiming for any expenses is that you can only claim for expenses which are ‘wholly and exclusively’ incurred in the performance of your duties (so unless you’re Jeff Beck, let the guitar lie).

However there are some differences:

Accommodation

You can claim full tax relief on accommodation costs, such as an overnight hotel when travelling for business-related purposes.

Accountancy fees

You can claim any associated accountancy fees incurred for doing your tax return.

Bank charges

You’re able to claim for monthly fees or charges incurred, which is good news if your cash flow is in crisis.

Business mileage

If you use your personal vehicle for business travel to a temporary work location, you’re able to claim a mileage allowance (using HMRC’s business mileage rates) – but make sure you keep a mileage log to support this claim. You’re allowed to claim the full running costs of your vehicle (such as insurance, repairs and servicing) or you can just choose to claim the mileage rates for journeys you make.

Equipment and office furnishings

You can claim for your laptop, personal computer and office furniture, if these are necessary to carry out your business. Similarly, you can claim for any specialist software that you need to do your work.

Landline and broadband costs

If you’re using a home phone line/broadband for both business and personal calls, you can’t claim for line rental because they have a dual purpose. However, you may claim expenses for the business phone calls used on that line, provided they can be identified on the phone bill. Alternatively, and arguably less stressful, you could set up a separate phone line in your business name which is used 100% for business.

Legal and professional fees

Any legal or professional fees incurred while doing your job are claimable, as are professional subscriptions. So if you’re an actor, your Spotlight membership subscription is a taxable allowance, and if you’re a radiologist then so is membership to the Royal College of Radiologists.

Marketing, advertising/PR

Those Facebook ads can be pricey, but the good news is you can claim tax relief on them – as well as other advertising, such as press releases and TV and radio ads.

Mobile phone

You can claim a reasonable portion of your mobile phone bill for business use (so if 30% of your bill is business-related, then you can claim that).

Office expenses

If you work out of an office, you can claim expenses for:

  • Rent for business premises
  • Business and water rates
  • Utility bills
  • Property insurance
  • Security
  • Repairs and maintenance

Specialist clothing

Those Manolos don’t count unless you’d lose your clients without them. But if you’re an actor, for example, you can claim on clothing used specifically for a role, or if you’re a dancer, your dance shoes are tax deductible – as long as you don’t wear them to go shopping in.

Sub-contractors

If you use other freelancers, agencies or other suppliers to help you deliver your products or services, then you can claim these costs in full.

Subsistence (food and drink)

You can claim extra allowable costs for food and drink if you need to travel for your work – for example, paying for breakfast on your way to a meeting or job, or dining out if you’re staying overnight somewhere. That doesn’t mean you have to go to the most expensive hot spot you can find though.

Training

If you’re doing some training that relates to your registered trade, then you can claim it. You can also claim the cost of upgrading existing skills that will support your future business income.

Working from home

If you do all or most of your work from home, you can claim a flat-rate fee as an allowable expense or apportion actual costs using our Coconut Work from Home Allowance calculator.

Disallowable expenses

There are some things that you are not allowed to claim as an expense.

Entertainment

In short, entertaining clients (even if it's all business, no pleasure) can't be claimed. This is a blanket rule that HMRC has, because it's hard to draw a line between business and pleasure when it comes to this type of expense. This applies to entertaining clients, prospects, third parties, and also yourself.

If you have employees, then staff entertainment is a separate concept, which you can claim for (within certain limits).

Wages

If you make regular payments to your personal account from your business account, you may call this your "wages". But, as you’re a sole trader, there's no distinction between you and your business. This means that paying yourself is effectively the same thing as moving money between your own accounts. As such, it isn’t counted as an expense, and doesn't impact your profit or tax calculation.

What receipts should I keep for my expenses?

In short, as many as you can. Credit and debit card receipts aren’t technically valid, because there’s no detail about what was purchased and no evidence that purchases are wholly and exclusively for your business. Moreover, if you’re registered for VAT, there’s no split on the VAT account.

The gold standard is to keep every single business receipt, just in case. What counts as a receipt is something that shows what was purchased, date, value and VAT if applicable. If cash is withdrawn, then receipts will be needed to account for each purchase.


Perhaps the most exciting and frightening bit of the tax return, getting your expenses right is important. It can be a lovely surprise to find out that things you thought you’d shed money on can provide you with some relief. But it’s important to get your deductibles in a row.

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