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, such as 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 you only claim for the portion of an expense or purchase which relates entirely to business purposes, you should be allowed to claim it.

What are some examples?

Some common examples of allowable expenses for freelancers include:

• 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. The exact amount depends 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 flat rates for working from home.

The rules are different for freelancers operating through limited companies, which can’t use the flat rate method. A company can reimburse staff or directors for 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 though, that travelling to a regular workplace may count as ordinary commuting. This 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. 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?

Claims are made through your tax return, where you’ll have the choice of claiming your expenses, or simply offsetting HMRC’s £1,000 trading allowance against your income to reduce your taxable profits.

You can only use one or the other against your tax bill, not both at the same time. Whether or not using your trading allowance is worthwhile comes down to how much you spend running your business. It’s worth noting the Trading Allowance is increasing to £3,000 from April 2027, but you’ll only be able to apply it to income earned from that point onwards – don’t backdate it!

Freelancers who operate through limited companies can also claim allowable business expenses, although the process differs from sole traders. Expenses are normally either:

• Paid directly by the company which then claims tax relief on its Company Tax Return; or,
• Reimbursed to the director or employee who paid it with personal money, and then the company claims relief on the reimbursement instead

Can an accountant help freelancers claim more expenses?

Yes, an accountant can absolutely help you identify any overlooked expenses, and also offer bespoke advice on other types of tax relief you might be able to use.

 
Head over to our information hub for more guides, news and advice on navigating life as a professional freelancer, from finance to tech and more.

The post Freelance Expenses You’re Probably Forgetting to Claim appeared first on Freelancer News.

You may be worried about it taking work from you – or maybe even replacing you entirely. But what if you could somehow use it to your advantage, turning it into a kind of assistant or sidekick?

In this article, we’ll explain what AI actually is, then break down the different ways you can make use of it as a freelancer in 2026. Some of them may surprise you!

What is AI?

Quite simply, artificial intelligence is inspired by human intelligence, with it being able to problem solve, make decisions, search the web, and much more.

It’s now a part of our everyday lives, and can be found in things like customer service bots and voice assistants (namely Siri and Alexa).

As with any kind of technology, it’s continually improving, which means its potential uses will continue to increase over time.

Will AI replace freelancers?

If you’re a freelancer, it can be difficult to view AI as anything other than a threat – especially when it’s starting to be deployed in creative industries.

Which is fair – it’s pretty much inarguable that it’s capable of carrying out tasks at a much faster rate than human beings, making it appear much more efficient on paper.

But thankfully, there are some things it just can’t replicate.

The limitations of AI – so far

AI lacks basic human emotions such as empathy or humour, as well as the ability to think rationally (and irrationally!) and make judgment calls. After all, knowledge doesn’t equal experience. AI hasn’t done the things human beings have so it’s more likely to get things wrong or incorporate outdated information.

There’s also the issue of content duplication. AI lacks original thought and can only rephrase preexisting information it has access to.

All of this is to say that freelancers most certainly still have a place, and so you shouldn’t get hung up on the notion of AI coming to steal your job – at least not yet anyway.

How can I use AI to help my freelance business?

Far from being an enemy, AI can actually be your friend if you’re willing to collaborate with it.

This may seem counterintuitive – or even blasphemous – if you’re a creative freelancer, but you just have to look at it as another tool in your toolbelt.

By its very nature, AI excels at sorting through information and coming up with detailed plans, which you may find useful if you’re a copywriter, for example.

It can act as a kind of sounding board for you to bounce ideas off of and also has the potential to improve your overall accuracy by spotting errors and fact-checking copy (e.g. Grammarly).

Employed in this way, AI can enable you to focus on the actual content of your work, as opposed to worrying about things like spelling and structure.

What’s more, you can also use it to keep up to date with the latest data and insights from the different industries you might be involved in.

Can AI save me time?

One of the realities of being a freelancer is that you likely have to spend a lot of time on tedious administrative tasks, such as scheduling meetings and sending out payment reminders.

An AI scheduling assistant can sort everything out for you, saving you precious time and freeing you up to focus on what you do best. Have a look at AI calendar apps like Clockwise, which can be a nice, easy option to help you stay organised.

If, on the other hand, it’s the financial side of things that’s slowing you down, consider using online accounting software like Pandle, which offers a plethora of powerful automations at a fair price.

What roles suit AI the most?

So, you’re willing to give AI a chance. But where is it best utilised to boost your overall efficiency?

Well, its technical nature means it’s good in various admin roles and can also assist you in writing clean, grammatical copy. For example, Grammarly as we’ve mentioned, highlights errors and offers useful suggestions.

AI’s ability to engage in conversation also makes it an effective brainstorming tool, as it can spark ideas and help get your creative juices flowing, offering different perspectives. AI tools like Chat GPT and Claude are great for this.

Additionally, it can also be used for data analysis and general bookkeeping, with some providers offering real-time financial updates.

Can AI help freelancers earn more?

Theoretically, yes, as it can enable you to work faster and more efficiently – but without lowering the quality of your work or losing your unique human perspective.

As such, you should be in a position to take on a greater number of clients, being better prepared to handle a larger workload.

 
Head over to our information hub for more guides, news and advice on navigating life as a professional freelancer, from finance to tech and more.

The post How You Can Turn AI Into Your Freelance Ally (Not Your Competition) appeared first on Freelancer News.

A step in the right direction

The mileage allowance increasing from 45p to 55p is one of the most practical real-world changes for self-employed people. The rate has been frozen since 2011, and could mean significant savings when claiming back expenses.

The catch:

The rate change only applies to people who use their personal car or van for work. It means self-employed people from trades to driving instructors and dog walkers can claim up to £1,000 more in allowable mileage for the first 10,000 miles.

Perhaps not far enough:

The rate remains unchanged at 25p for any mileage above 10,000 miles. After a 15-year wait for policy change, this may leave some frustrated.

What the savings could mean

Lee Murphy, Managing Director at The Accountancy Partnership, explains why the uplift is really important for self-employed people and what mileage rate savings could mean:

“We’ve seen lots about what this change means for employees, but we really want to highlight what this means for people who are self-employed. The same benefits apply.

“Many self-employed people like tradespeople will rely on their personal vehicle to drive between jobs, be it a van or a car. They’ve likely been absorbing persistent cost of living increases associated with that vehicle, such as rising fuel and maintenance fees.

Potential cash flow relief

“The change in allowance marks a step in the right direction, something that can make a practical and meaningful difference to their taxable profits. As small as it sounds, that 10p extra can provide cash flow relief and increase financial security on something relied upon for work.

Backdated relief

“What’s really useful to see is that the new 55p rate can be backdated to April 2026. We advise our clients to keep accurate mileage records, so it’s great to know they’re able to receive the full benefit of the change this tax year, not next.

Tips for claiming self-employed mileage expenses

Helping to clear up any confusion around the latest mileage allowance update, Lee Murphy reveals his tips for how self-employed people hoping to understand and benefit from the government update:

Keep accurate mileage records

“HMRC may ask for evidence to support vehicle expense claims, such as mileage. Keep records accurate and well organised for at least six years after the end of the relevant tax year.”

Remember to back date

“Don’t forget the increase in mileage allowance is backdated to the beginning of the tax year (April 2026). Use your mileage records to claim the full benefit of the updated policy with the new rates.”

Ensure you’re using a personal vehicle

“The mileage allowance increase only applies to the use of personal vehicles for work. It may not apply in the same way if you are hiring a vehicle or if you own a vehicle through your limited company.”

Don’t include personal trips

“It’s important to make a clear distinction between a personal or business trip. Business miles must be exclusively made up of travel for business purposes. You can’t include commuting to work.”

Check you’re using the most efficient method to claim

“It’s up to you whether you work out your claim using the simplified flat-rate per mile method, or by calculating the actual costs such as fuel, maintenance, and insurance. If the actual costs are higher than what you’d get back claiming the rate per mile, use those instead.”

The post What The 55p Mileage Rule Means for Self-Employed Drivers appeared first on Freelancer News.

It’s rolling out in phases, beginning in April 2026, but whether or not you need to start complying with the MTD rules depends on your qualifying income.

In this article, we’ll go through the key changes and also explain how you can best prepare yourself for the switch to MTD.

What is MTD IT?

Making Tax Digital for Income Tax (MTD IT) is HMRC’s plan to replace the Self Assessment with a new digital reporting system. It’s being rolled out gradually, starting with sole traders and landlords.

What will change?

In short, the arrival of MTD IT means instead of submitting a Self Assessment tax return, those that qualify will need to record their Income Tax records digitally and submit quarterly updates to HMRC via approved software.

You must also send a final submission (called a ‘Final Declaration’) once the tax year is complete; this will include all your income from the year, not just your ‘qualifying’ income.

What counts as qualifying income?

MTD IT applies to any sole trader and property (rental) income, and refers to your gross turnover (total money in before expenses), not your net take-home profit.

Your final submission may also include income from other sources (e.g. dividends, wages from traditional employment, or your share of a partnership’s profits). HMRC won’t count this towards your qualifying income for MTD reporting purposes, but you’ll need to include it on that final tax return so you can be taxed on everything correctly.

Does MTD affect freelancers?

As a freelancer, you earn self-employed income, so if you operate as a sole trader these changes will apply to you.

When exactly you need to start complying depends on your income level, with the new system rolling out gradually over time.

For example, if your qualifying income from freelancing and/or property is over:

• £50,000 in the 2024/25 tax year; from April 2026
• £30,000 in 2025/26; from April 2027
• £20,000 in 2026/27; from April 2028

If your turnover is more than £50,000, it could be worth considering operating through a limited company for tax-efficiency.

That would mean completing a Company Tax return and paying Corporation Tax instead – but ask an accountant first to weigh the pros and cons.

What happens if you don’t pay?

There are penalties for non-compliance, with HMRC using a points-based system based based on a percentage of your earnings for this and late payment penalties.

As MTD IT is still in the early stages, penalties are not currently being issued if you’re late submitting a quarterly update, but they will start being issued after the 2026/27 tax year.

After this, missing a deadline to submit a quarterly update will earn you a point, and you’ll receive a penalty of £200 if you receive four points.

Your MTD Income Tax Return is due annually, and missing the deadline earns you a point.

With this, though, a £200 penalty is applied if you receive just two points.

How do I comply with MTD?

The MTD IT rules talk about keeping ‘digital’ records, which means you’ll need to start recording your income and expenses using MTD-compliant software.

Once you have the software, you’ll:

• Create digital records for all your business transactions
• Send quarterly updates – due one calendar month and 7 days after the end of each quarter
• Submit a Final Declaration (which will include all of your other income too, not just your self-employment/property income – so it replaces the current Self Assessment)

Is anyone exempt?

You can apply for an exemption against using MTD IT if it’s simply not practical for you to keep and submit digital records – for example, due to age, disability, or religious beliefs.

You won’t need to comply at all if:

• Your qualifying income is below £20,000
• You’re a non-resident company, trust, or estate
• You don’t have a UK National Insurance number

Preparing yourself for MTD

So, you need to start complying.

Even if you don’t just yet, getting started with digital record keeping now will make your life a whole lot easier down the line – and if MTD IT is on the horizon for you, there’s no harm in getting ahead of it.

Thankfully, there are a number of steps you can take to help get yourself ready.

Get software

The first thing you’ll want to do is look for online accounting software that’s fully compliant with Making Tax Digital.

Ideally it will meet the requirement for digital bookkeeping and be able submit your quarterly updates and final declaration directly to HMRC. Not all software will do both, so you might need additional bridging software to connect your digital records to HMRC unless the connection is already available!

Do some research and try to find bookkeeping software that’s right for you, based on your own needs and preferences.

Remember: the simpler the better.

Align your reporting periods

Your quarterly updates will align with the standard tax year quarters. Fortunately, under recent tax rule changes, your accounting software will automatically handle this timing for you, so you do not need to worry about changing your business year-end dates.

Plan ahead

Now, if you are someone who doesn’t yet need to follow the MTD rules, you can actually choose to opt in early – and if you’re going to start digitising your records anyway, then this makes a lot of sense.

If you do sign up early, you must obviously make sure you’re following the rules and meeting the various deadlines throughout the year.

It might not be mandatory for you yet, but getting everything in place early is the smart way to go.

You could also speak to an accountant, who will simplify the whole process and ensure you’re operating in the most tax-efficient way possible.

They may even be able to recommend MTD-compliant bookkeeping software.

 
Head over to our information hub for more guides, news and advice on navigating life as a professional freelancer, from finance to tech and more.

The post When Will MTD Affect Freelancers? appeared first on Freelancer News.