Five expenses sole traders forget to claim

An allowable expense reduces your taxable profit, which reduces your tax. Miss one and you have simply paid tax you did not owe. HMRC’s online return will not tell you — it accepts whatever you type. These are the five we most often find missing when we take over a set of records.

1. Use of home as office

If you work from home, you can claim towards the cost. The simplified flat rate is based on hours worked per month and needs no receipts. Alternatively you can apportion actual costs — rent or mortgage interest, council tax, utilities, insurance — by rooms used and time used for business.

The apportioned method usually produces a bigger claim, but it needs records. Most people default to the flat rate without checking whether the other one is worth more.

2. Business mileage

45p per mile for the first 10,000 business miles in a tax year, then 25p. That covers fuel, insurance, servicing and depreciation, so you do not claim those separately.

The catch is that you need a log. Ordinary commuting to a regular workplace does not count, but travel to clients, suppliers and temporary sites does. A year of unrecorded client visits is a genuinely significant sum to lose.

3. Pre-trading expenses

Costs incurred in the seven years before you started trading can generally be treated as incurred on your first day of business — equipment, professional fees, initial stock, a website built before launch.

Almost nobody thinks to go back and look, because it does not feel like it belongs to the business yet.

4. Phone and broadband

You can claim the business proportion of a personal phone and broadband bill. It requires a defensible basis for the split rather than a guess, but the amount over a year is far from trivial.

5. Professional subscriptions, training and software

Fees to approved professional bodies, trade subscriptions, and software you use to run the business are all allowable. Training is allowable where it maintains or updates skills you already use in the business — training to enter an entirely new field generally is not.

What you cannot claim

Client entertaining is not allowable, however commercially sensible it was. Ordinary commuting is not allowable. Clothing is not allowable unless it is a genuine uniform or protective equipment. And anything with a personal element must be apportioned rather than claimed in full.

If you are not confident your expenses are complete, that is exactly the sort of thing a free initial consultation is for — we usually find something.