Running your own business means wearing many hats and keeping a close eye on your expenses is one of them. When it comes to completing your Self Assessment tax return, knowing precisely what you can (and can't) claim as an allowable expense makes a big difference to your bottom line.
Here's a rundown of the top tax deductions you can claim in 2026 to reduce your taxable profit and keep more money in your pocket.
What counts as an 'allowable expense'?
Put simply, it's a cost you incur wholly and exclusively for running your business. HMRC won't let you deduct personal expenses, but they will allow you to deduct genuine business costs. Such costs include:
Working from home costs
If you use a room in your home for admin, client calls or managing your business, you can claim a proportion of:
• Rent or mortgage interest
• Council tax
• Utilities (electricity, gas, water)
• Internet and phone bills
There are two ways to claim:
• Simplified expenses – a flat rate, currently £6 a week, or
• Actual costs – more accurate, but involves working out a percentage of your bills
Travel and mileage
You can claim for business-related travel, but not for commuting to a regular workplace. This includes:
• Fuel or mileage allowance (45p per mile for the first 10,000 miles in 2026)
• Parking and tolls
• Train, bus, or taxi fares
• Hotel and subsistence costs if you need to stay overnight
Important: Keep detailed records and receipts, just in case HMRC asks.
Office and stationery supplies
Even if you don't rent an office, you can still claim:
• Printer paper, pens, postage
• Software and apps used for your business (e.g. accounting tools, design software, cloud storage)
• Phone and broadband costs (business-use portion only)
Marketing and advertising
Every pound spent promoting your business is tax-deductible. This includes:
• Website costs
• Social media advertising
• Business cards and flyers
• Advertising
• Trade stands and exhibitions
• Directory listings
The costs for attending networking events can also be claimed. However, tread carefully with client entertainment (more on that below).
Professional fees and insurance
You can claim:
• Accountant or bookkeeper fees
• Business insurance (public liability, professional indemnity, employers' liability, etc.)
• Bank charges and interest on business loans or credit cards
• Trade subscriptions or professional memberships
Business premises and equipment
If you rent a workspace, you can claim the rent and running costs. You can also claim for equipment you buy for your business, such as:
• Laptops and mobile phones
• Tools and machinery
• Office furniture
Some items may need to be claimed as capital allowances. The team at DWilkinson&Company can advise you on this and the best approach for you.
Staff and subcontractor costs
If you pay people to help with your business, you can claim:
• Wages and salaries
• Employer’s National Insurance contributions
• Subcontractor payments (make sure they're properly classified)
• Staff training relevant to your trade
Business entertainment – be cautious!
Client meals, gifts and entertainment aren't usually allowable, even if they're 100% business related. HMRC is strict on this one.
The exceptions? Staff entertaining, such as an annual party under £150 per person, may be allowed if certain conditions are met.
Don't miss out – and don't fall foul of HMRC
Every unclaimed expense means you're potentially paying too much tax. But claiming expenses you shouldn't, can trigger penalties or wider investigations from HMRC.
The key is keeping accurate records and separating business from personal costs. If in doubt, speak to us.
Need help getting your books in order?
At DWilkinson&Company in Rochdale, we support self-employed businesses just like yours with clear, up-to-date financial information that makes tax time less stressful and helps you keep more of what you earn.
If you're unsure what you can claim or want help sorting out your records for the year ahead, please get in touch.
