Every year, small business owners leave money on the table by missing legitimate allowable expenses. These aren’t exotic tax loopholes – they’re everyday business costs you’ve already paid for but might forget to claim when preparing your accounts.
Let’s make sure you don’t miss out this year. Here are the commonly overlooked allowable expenses that could reduce your tax bill.
Working From Home Expenses
If you use part of your home for business, you can claim a portion of your household costs. Many business owners forget this one entirely or underestimate what they can claim.
You can claim:
- A simplified flat rate (£6 per week for 25-50 hours, £10 per week for 51-100 hours, £26 per week for 100+ hours)
- OR actual costs: a proportion of mortgage interest or rent, council tax, utilities, internet, and home insurance based on the business use of your home
Don’t forget: If you have a dedicated office space, you can also claim business rates if applicable.
Mileage and Travel Costs
Business travel is often underclaimed because people forget to log their journeys or don’t realise what counts as business mileage.
You can claim:
- 45p per mile for the first 10,000 business miles, then 25p per mile after that
- Parking fees and congestion charges for business trips
- Train, bus, and taxi fares for business travel
- Overnight accommodation when travelling for business
Important: Commuting from home to your regular place of business doesn’t count, but travel from home to meet clients, attend meetings, or visit suppliers does.
Keep a mileage log with dates, destinations, business purposes, and miles travelled. A simple spreadsheet or mileage app works perfectly.
Professional Development and Subscriptions
Investing in your skills and knowledge is allowable, yet many business owners forget to claim these costs.
You can claim:
- Professional membership fees (accounting bodies, trade associations, industry groups)
- Training courses and qualifications relevant to your current business
- Business books, magazines, and online subscriptions
- Conference and seminar fees
- Webinars and online courses
Watch out: Training for a new profession or qualifications that would let you do a different job aren’t allowable. It needs to relate to your current business activities.
Technology and Software
In our increasingly digital world, these expenses add up quickly and are easy to overlook.
You can claim:
- Accounting software subscriptions (Xero, QuickBooks, FreeAgent)
- Cloud storage services used for business
- Website hosting and domain names
- Email marketing platforms
- Project management tools
- Video conferencing software
- Stock photo subscriptions
- Design software and apps
Pro tip: If you use software for both business and personal use, you can only claim the business proportion. Be reasonable and keep a note of your calculation.
Bank Charges and Finance Costs
These small amounts slip through the cracks, but they add up over the year.
You can claim:
- Business bank account fees and charges
- Merchant fees from card processors
- PayPal or Stripe transaction fees
- Bank overdraft interest
- Interest on business loans and credit cards
- Hire purchase interest (the interest portion, not the capital)
- Leasing costs
Don’t forget: If you’re a sole trader, you can claim interest on loans used for business purposes, even if they’re in your personal name.
Insurance Premiums
Business insurance is essential, and thankfully it’s fully allowable.
You can claim:
- Professional indemnity insurance
- Public liability insurance
- Employers’ liability insurance (required if you have employees)
- Business contents and equipment insurance
- Cyber insurance
- Vehicle insurance (business portion if mixed use)
Marketing That Doesn’t Feel Like Marketing
Some business owners don’t realise that various forms of business promotion are allowable expenses.
You can claim:
- Website development and maintenance
- Social media advertising
- Google Ads and other online advertising
- Business cards and promotional materials
- Sponsorship of local events
- Promotional gifts (under £50 per person per year)
- Photography for your website or marketing materials
Phone and Internet
If you use your mobile phone or home broadband for business, don’t forget to claim.
You can claim:
- A proportion of your mobile phone bill if you use it for business
- Business mobile contracts
- A proportion of home internet costs
- A dedicated business landline
Keep records of your usage pattern to justify the business proportion you’re claiming.
Repairs and Maintenance
Keeping your business equipment and premises in working order is allowable, though many people confuse repairs with improvements.
You can claim:
- Repairs to business equipment and machinery
- Maintaining business premises
- Servicing of business vehicles
- Routine maintenance and upkeep
Can’t claim: Improvements or upgrades that enhance the asset (these may qualify for capital allowances instead).
Pension Contributions
This is a big one that’s often missed, especially by company directors.
If you’re a limited company director, employer pension contributions are allowable for corporation tax purposes and don’t count as a benefit in kind. This can be a very tax-efficient way to extract money from your business.
Small Expenses That Add Up
Don’t dismiss the little things. They accumulate over the year:
- Postage and courier costs
- Stationery and printing
- Printer ink and paper
- Cleaning supplies for your office
- Tea, coffee, and biscuits for your office
- Business-related subscriptions (industry publications, research tools)
Getting It Right
The key to claiming these expenses is having proper records. HMRC can ask to see evidence for anything you claim, and you’re required to keep records for at least 5 years.
Before you claim, ask yourself:
- Is this expense wholly and exclusively for business purposes?
- Do I have a receipt, invoice, or bank statement showing the payment?
- Can I explain the business purpose if HMRC asks?
If the answer is yes to all three, you should claim it.
Don’t Leave Money on the Table
Review your bank statements from the past year with these categories in mind. You’ll likely spot dozens of legitimate business expenses you’ve already paid for but haven’t claimed.
Every pound you claim in allowable expenses reduces your taxable profit. For a sole trader or partnership, that could save you up to 47% in income tax and National Insurance (45% income tax plus 2% NI). For a limited company, it’s 25% in corporation tax (19% for profits under £50,000).
Those forgotten £5 and £10 expenses? They’re worth claiming. That professional subscription you paid in January? Definitely allowable. The mileage to visit that client? Log it and claim it.
Need help identifying what you can claim? That’s exactly what we’re here for. Let’s review your expenses together and make sure you’re keeping more of what you’ve earned.
