If you’re a sole trader in the UK, claiming allowable expenses is one of the simplest ways to reduce your tax bill. Every legitimate business expense reduces your taxable profit, meaning you pay less Income Tax and National Insurance.

However, many business owners either miss valid expenses or don’t realise what they’re entitled to claim. This guide highlights seven commonly overlooked expenses and explains how to claim them correctly.

Before looking at specific examples, it’s important to understand the key HMRC rule:

An expense must be “wholly and exclusively” for business purposes to be allowable.

If something is used for both personal and business use, you can only claim the business portion.

What you can claim:

If you work from home, you can claim a proportion of your household costs, including:

• Rent or mortgage interest
• Council tax
• Electricity, gas, and water
• Internet and phone bills

You can either use HMRC’s simplified flat rate or calculate the actual business proportion of your costs.

How to claim it:

Choose either:

• A flat monthly rate based on hours worked, or
• A percentage of your household costs based on business use

Why it’s often missed:

Many sole traders work from home but don’t claim anything at all.

What you can claim:

• Business mileage using HMRC-approved rates
• Train, bus, and taxi fares for business journeys
• Parking, tolls, and congestion charges

What you cannot claim:

• Your everyday commute to a regular place of work

How to claim it:

Keep a log of business journeys including:

• Date
• Purpose
• Distance or cost

Why it’s often missed:

Many sole traders only think about fuel and overlook other travel costs.

What you can claim:

• Accounting software (e.g. Xero, QuickBooks)
• Cloud storage and office software
• Website hosting and domain names

How to claim it:

These are usually 100% allowable if used solely for business purposes.

Why it matters:

These are essential operating costs for many modern businesses.

What you can claim:

• Website design and maintenance
• Online advertising (Google Ads, Facebook Ads, LinkedIn)
• Printed marketing materials

How to claim it:

Marketing costs are fully deductible as long as they are business-related.

Why it’s important:

This is one of the easiest ways to reduce tax while growing your business.

What you can claim:

• Courses that improve your current business skills
• Ongoing professional development

What you cannot claim:

• Training that helps you start a completely new business or trade

How to claim it:

Ensure the course directly relates to your existing business activities.

• Claiming personal expenses as business costs
• Not splitting mixed-use expenses correctly
• Failing to keep receipts or records
• Overlooking smaller expenses that add up over time

Claiming the right expenses is one of the simplest ways for sole traders to reduce their tax bill legally. The key is understanding what you can claim, keeping accurate records, and ensuring everything is properly justified.