Business Expenses Tax Relief Calculator
Calculate the income tax relief on your business expenses as a UK sole trader or self-employed worker.
Tax Relief on Expenses
Frequently Asked Questions
Sole traders can deduct: stock and materials, equipment (capital allowances or AIA), subcontractors, marketing, professional fees (accountant, legal), vehicle costs, travel, insurance, phone, and home office costs.
The AIA lets you deduct 100% of qualifying plant and machinery costs (up to £1 million) in the year of purchase. This is much better than spreading depreciation over years.
Yes. Use HMRC's simplified expenses: £10/month (25-50 hrs), £18/month (51-100 hrs), £26/month (100+ hrs). Alternatively, calculate the actual proportion of home costs for business use.
Simplified expenses lets you use flat rates for vehicles (45p/mile for first 10,000 miles), home office, and living at your business premises. Simpler than keeping detailed records.
Training that maintains or improves existing skills for your current trade is deductible. Training to start a new trade or career is not deductible as a business expense.
Keep receipts for all business purchases. HMRC requires records for 5 years from 31 January after the tax year end. Digital records (photos of receipts) are acceptable.
Use actual costs (fuel, insurance, maintenance proportioned to business use) or the simplified 45p/mile rate (first 10,000 miles), 25p/mile thereafter. Mileage rate is simpler for most.
Business entertainment costs are not tax deductible in the UK. Staff entertaining up to £150/head per year can be deducted. Client meals, events, and hospitality are not allowable.
Sole trader personal pension contributions are not deducted from business profit — they get personal tax relief instead. Limited company employers can make employer pension contributions as a business expense.
The £1,000 trading allowance lets you earn up to £1,000 of trading income tax-free without keeping records. Above £1,000, you can deduct either the allowance or actual expenses — whichever is greater.
Yes. HMRC-approved professional subscriptions directly related to your trade are allowable business expenses for self-employed workers.
Business insurance premiums (public liability, professional indemnity, employer's liability) are fully deductible business expenses. Personal life insurance or income protection are not.