Sole Trader Tax in the UK: 9 Deductions You're Probably Missing

Most sole traders overpay tax simply because they don't claim everything they're entitled to. Allowable expenses reduce your taxable profit, and the difference over a year can be substantial. Here are nine deductions UK sole traders frequently miss. This is general guidance, not personal tax advice.

Use of home as office

If you work from home, you can claim a proportion of household costs, or use HMRC's simplified flat rate. Many sole traders forget this entirely or under-claim it.

Mileage and travel

Business mileage can be claimed at HMRC's approved rates, along with parking, tolls and public transport for business journeys. Keep a simple log and it adds up quickly.

Phone, broadband and software

The business-use proportion of your mobile, internet and the subscriptions you rely on (accounting tools, design software, cloud storage) are allowable expenses.

Professional fees and training

Accountancy fees, professional subscriptions and training that maintains or updates your existing skills are typically deductible.

Marketing, website and finance costs

Your website costs, online ads, print materials, business bank charges and interest on business borrowing are often overlooked but legitimately claimable.

Stay compliant and keep records

Claim only genuine business expenses, keep receipts for at least six years, and when in doubt get professional advice. Good bookkeeping is what makes confident claims possible.

Frequently asked questions

Can I claim expenses from before I started trading?

Often yes, certain pre-trading expenses incurred up to seven years before you start can be claimed. Check with an accountant.

Is the home-office flat rate worth it?

It depends on your actual costs. The flat rate is simpler; a proportional calculation can be larger. An accountant can compare both.

Related service: Accounting and Finance for sole traders