Expenses you can claim — and three you can't

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Most sole trader expense questions come down to one test: was it wholly and exclusively for the business? Here's where that test is easy, and where it isn't.

Usually fine: a proportion of home costs (rent, utilities, internet) based on the space and time your business actually uses, business mileage on the standard rate (rather than tracking fuel receipts, which is simpler and usually claims more), tools and equipment used for the trade, business insurance, and training that maintains or updates skills you already use in the business.

Usually not: training for a completely new skill or trade unrelated to your existing business (HMRC treats this as personal development, not a business cost), everyday clothing even if you only wear it for work (unless it's genuine protective gear or a uniform with a business logo), and client entertaining — meals, drinks or events for clients are not tax-deductible, even though the invoice clearly relates to the business.

The grey area that catches people out most: mixed-use costs — a laptop used 80% for the business and 20% personally, or a phone contract that covers both. HMRC expects a reasonable, consistent apportionment, not an all-or-nothing claim. "Reasonable" is doing a lot of work in that sentence, and it's usually where an enquiry starts if it ever does.

If you're not sure whether something clears the bar, ask before you claim it rather than after HMRC asks first.