Freelancers are entitled to claim back a wide range of business expenses to reduce their taxable profits, lowering their overall tax bill.
What you’re able to claim as a freelancer varies because it must be wholly and exclusively for business purposes. So, what one freelancer can claim might not be classed as an allowable business expense for another. There are other factors too, for example, whether you’re a sole trader or a limited company.
Some allowable expenses are more obvious than others – which means in many cases you could be paying more tax than you should.
It’s usually smaller, everyday costs that fly under the radar.
In this article, we’ll give you some examples of expenses that are easy to overlook, and also offer some tips on keeping track of your expenses so you always know what you can claim.
What business expenses can freelancers claim?
HMRC allow you to claim tax relief on expenses which are “wholly and exclusively” incurred in the course of running your business.
So, as long as an expense or purchase is made entirely for business purposes, you should be allowed to claim it.
What are some examples?
Some common examples of allowable expenses for freelancers include the following:
- Business premises: rent and utility bills
- Office costs: phone bills, stationery, IT maintenance, postage, etc.
- Items bought to sell on: stock, raw materials, etc.
- Legal and financial: accountancy services, insurance policies, solicitors and other legal fees
- Marketing and advertising: printed adverts and website maintenance costs, etc.
These are the more obvious ones, so let’s take a look at some allowable business expenses you may forget to claim.
A portion of your rent or mortgage
Freelancers who work from home may be able to claim a portion of their rent or mortgage interest as a business expense – but the rules depend on whether they’re self-employed as a sole trader or operate through a limited company.
Sole traders who work from home can generally claim a reasonable proportion of certain household expenses, with the exact amount depending on factors like the size of the space, as well as the amount of time spent working there.
Alternatively, sole traders also have the option of using HMRC’s simplified expenses flat rates for working from home.
The rules are different for freelancers operating through limited companies.
A company can reimburse qualifying additional household costs, but rent and mortgage interest do not qualify for this exemption.
Mileage costs
There may be times where you need to travel for work as a freelancer, and freelance sole traders can claim a mileage allowance based on what type of vehicle they use for the journey.
For example, in the 2026/27 tax year, the rate for cars and vans is 55p for the first 10,000 miles, and then 25p for any miles beyond that.
Motorcycles have their own flat rate of 24p per mile.
It’s important to note that travelling to a regular workplace may count as ordinary commuting, which is not deductible, so always check with an accountant first before you claim.
Travelling to business meetings
Freelancers can also normally deduct reasonable travel costs when travelling to a client meeting for business purposes.
Allowable expenses may include:
- Train, bus, and taxi fares
- Mileage when using a personal vehicle for business journeys
- Parking/toll road charges
- Hotel accommodation where an overnight business trip is necessary
HMRC also permits reasonable meal expenses for occasional business journeys outside a freelancer’s normal travel pattern, or where their work is itinerant (e.g. regularly travelling between locations).
Be careful, though, as things like everyday lunches and meals purchased for clients are not normally tax deductible, and you don’t want to get caught out.
Certain subscriptions
Here is where costs can add up. Many freelancers use things like Canva Pro, Hemingway Editor – as well as various software and editing tools. If you use them entirely for business – it’s classed as an allowable expense and can be deducted from your profit.
For freelancers who forget to claim this, it can be pretty costly! Especially with some subscriptions being so expensive.
Even subscriptions like Amazon Prime can be classed as a business expense, if and only if you use it exclusively for business.
How should freelancers keep track of business expenses?
You can do this by keeping invoices, receipts, and supporting records.
You should record smaller expenses regularly (as these are easy to forget about) and use good bookkeeping software to categorise transactions.
This has become even more important with the arrival of Making Tax Digital (MTD) for Income Tax, which requires those affected to keep their income tax records digitally and share this information with HMRC on a more frequent basis.
How do freelancers claim business expenses?
Self-employed freelancers can choose between claiming their actual allowable expenses or using HMRC’s £1,000 trading allowance to reduce their taxable profits, and claims are made through their Self Assessment tax return.
Whether or not the trading allowance is worthwhile comes down to how much you spend running your business.
Freelancers who operate through limited companies can also claim allowable business expenses, although the process differs from sole traders.
Expenses are normally paid directly by the company or reimbursed to the director if they paid personally.
Qualifying costs can reduce the company’s taxable profits, and ultimately its Corporation Tax bill.
Can an accountant help freelancers claim more expenses?
An accountant can help to identify any overlooked expenses, and also offer bespoke advice on distinguishing between business and personal costs.
In addition, an accountant may be able to recommend good bookkeeping software to support accurate record keeping and tax return preparation.
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