Business expenses you can report if you're self-employed

Place of business

Your ‘places of business’ are where you do your work.

You can claim running costs for these, including:

• rent
• utility bills, for example water and electricity
• business rates or council tax
• property insurance
• security and cleaning
• repairs and maintenance
• purchase, repair and maintenance of business equipment, for example computers or printers

You cannot claim business expenses for:

• lunch
• buying places of business
• any non-business use of business equipment

Using your home for business

You can claim business expenses for using part of your home for your self-employed work.

This might be for:

• providing services to a customer, for example as a hairdresser or an artist
• essential business administration, for example filing invoices, recording payments or stock taking
• other business activities, for example sales and marketing activities

You cannot claim business expenses for using your home for:

• storage
• completing tax returns for HMRC
• self-reporting your earnings for Universal Credit
• being on call
• being available to carry out work

To claim business expenses for using part of your home for your self-employed work, you can either:

• use simplified expenses

or

• calculate your actual business costs

To use simplified expenses, estimate the number of hours you used your home for business purposes and select the appropriate rate from the table below.

Living at your place of business

If you live in a building primarily used for your business, such as a pub or B&B, you can claim some of the running costs.

You can either:

• use simplified expenses

or

• calculate your actual business costs

To use simplified expenses, explain your total running costs and how many people live at your place of business. Your total running costs will be used and subtract:

Car, van and travel expenses

You can claim costs for business travel, including:

• public transport, for example train or bus fares
• taxi fares
• vehicle hire costs
• air travel
• hotel rooms
• meals during overnight stays
• parking, tolls and congestion fees

You cannot claim costs for:

• commuting (travel between your home and your normal place of business)
• personal or non-business travel costs
• penalties, such as parking fines
• the purchase, lease or acquisition of a car or minicab that is not specially adapted for business use

Simplified expenses or actual business costs

Reporting transport costs depends on the type of vehicle used

If you use a car or minicab that is not specially adapted for business use, you must use simplified expenses.

If you use a motorbike, a scooter or a vehicle that is specially adapted for business use (such as a van, black cab or driving instructor dual-control car), you can either:

• use simplified expenses

or

• calculate your actual running costs

To use simplified expenses, you'll be asked to report how many miles you travelled for business.

A flat rate will be used to calculate your costs.

For a car, van or other motor vehicle:

• 45 pence per mile for the first 833 miles in each assessment period

and 

• 25 pence per mile for every mile over 833 miles in each assessment period

For motorbikes or scooters: 24 pence per mile in each assessment period.

Tax, National Insurance and pension

You can claim business expense costs of any:

• income tax paid to HMRC on your self-employed earnings
• VAT paid to HMRC, if you report VAT-inclusive earnings
• Class 2 or Class 4 National Insurance contributions
• contributions paid into a registered pension scheme

These must be payments you actually made during the monthly reporting period, not estimates.

Reporting VAT

If you’re VAT registered, you can choose whether to include VAT when reporting your expenses.

You must be consistent. If you choose to include VAT, you should always report any VAT that you have paid to HMRC.

If you do not choose to include VAT, you should never report it.

Goods and materials

You can claim business expenses for goods and materials.

This includes:

• stock and goods for resale
• raw materials
• direct costs from producing goods
• the monetary value of any work your business did as payment in kind for goods or services
• any other goods and materials costs that are necessary and appropriate to your business

Office and equipment costs

You can claim business expenses for office and equipment costs.

This includes:

• phone, mobile and internet bills
• stationery and postage
• printing, including printer ink and cartridges
• computer software
• equipment or tools, including purchase, hire or repair
• any other office or equipment costs that are necessary and appropriate to your business

Marketing and advertising

You can claim expenses for growing your business.

This includes:

• advertising and marketing
• free samples
• website costs

Clothing costs

You can claim business expenses for work clothing.

This includes:

• uniforms
• protective clothing needed for your work
• costumes, for example for actors or entertainers

You cannot claim the costs of normal clothing, even if you wear it for work.

Legal and financial costs

You can claim business expenses for legal and financial work done for your business. 

This includes:

• business loan interest (up to a maximum of £41 each month)
• accounting fees
• legal fees
• insurance
• bank charges
• your share of the expenses, if you’re in a business partnership
• expenses from a company that you own or have control over, for example where you are a director

You cannot claim the costs for repaying business loan capital.

Professional subscriptions

You can claim business expenses for professional subscriptions if they are related to your business.

This includes:

• subscriptions to trade or professional journals
• trade body or professional organisation membership

Staff expenses

You can claim business expenses for:

• staff and employee wages
• subcontractor costs
• employer’s pension scheme contributions
• employer’s National Insurance contributions
• bonuses and benefits
• agency fees
• training courses related to your business
• your salary, if you pay yourself a salary using PAYE

You cannot claim the costs of:

• carers or domestic help, for example nannies or gardeners
• wages paid to a business partner

When to report your expenses to Universal Credit

You must report your self-employed expenses to Universal Credit once a month. You normally do this in your online account. You will be sent a text message or email when you need to report this.

You will not get your Universal Credit payment until you have reported your business expenses. If you report late, your payment may be delayed.

If you are not able to report online, you’ll need to contact Universal Credit.