For many freelancers across the UK, understanding which business expenses are allowable can make a significant difference when preparing for the 2026 tax return. As the new tax year approaches, staying informed about HMRC rules is essential to maximise deductions, reduce tax liability, and keep your finances compliant. Whether you’re a designer, consultant, photographer, developer, or any self-employed professional, this guide breaks down what you can and cannot claim — in simple, practical terms.

What Are Allowable Expenses?

Allowable expenses are costs that HMRC permits freelancers to deduct from their taxable income. These costs must be:

• Wholly and exclusively for business use

• Necessary to keep your freelance work running

• Clearly recorded with receipts or supporting documents

By correctly claiming allowable expenses, you only pay tax on your profit, not your total income — meaning lower tax bills and better cash flow.

1. Home Office Expenses

Many freelancers work from home, making this one of the most common and valuable categories.

You can claim for:

• A portion of rent or mortgage interest

• Utility bills (electricity, heating, water)

• Council tax

• Broadband and phone bills

• Home office equipment (chair, desk, lighting)

You can calculate this in two ways:

A) Flat Rate Simplified Expenses

HMRC allows a fixed monthly deduction based on hours worked from home.
Simple, quick, but may not maximise savings.

B) Actual Cost Method

Calculate the exact percentage of home expenses attributed to business use.
More precise and often leads to higher deductions — especially if you work full-time from home.

2. Office Supplies & Equipment

Running a freelance business requires tools, software, and everyday essentials.

Claimable items include:

• Laptops, tablets, monitors, keyboards, printers

• Software subscriptions (Adobe, Microsoft 365, CRMs, project tools)

• Stationery, printer ink, notebooks

• Cloud storage and collaboration tools

If equipment has a long-term use (laptop, camera, etc.), it typically falls under capital allowances, meaning you can usually deduct the full value using the Annual Investment Allowance (AIA).

3. Travel & Mileage Costs

If you travel for your freelance work, several expenses can be claimed.

You may claim:

• Mileage when using your personal vehicle

• Parking fees

• Public transport tickets

• Hotel stays for work trips

• Meals while travelling for business

However, commuting from home to a regular workplace is NOT allowable.

Mileage Rates (HMRC-Approved)

• 45p per mile for the first 10,000 miles

• 25p per mile thereafter

Keep a mileage log to stay compliant.

4. Marketing & Advertising Costs

Anything used to promote your freelance services is usually allowable.

Examples include:

• Social media ads

• Website hosting & domain name

• Branding and design costs

• Print materials (flyers, business cards)

• Professional photography

Investing in visibility is not just good for tax efficiency — it's good for growth.

5. Professional Fees & Services

Freelancers often rely on external experts to support the business.

You can claim for:

• Accountancy fees

• Legal advice

• Business insurance (public liability, professional indemnity)

• Bank charges on business accounts

• Subscription fees to professional bodies or industry organisations

These services support your operations and are fully deductible.

6. Training & Skill Development

If you undertake training directly related to your current freelance work, HMRC usually allows it.

Allowable training includes:

• Courses that enhance your existing professional skills

• Workshops

• Industry certifications

• Online seminars

However, courses to learn new industries or unrelated skills are not claimable.

7. Phone & Internet Bills

If you use your mobile phone or broadband for business, you can claim the business-use percentage of these bills.

Example:

If 60% of your mobile usage is for freelancing, you can claim 60% of the cost.

Ensure you have evidence (phone logs, invoices, or usage estimates).

8. Clothing & Personal Items — Be Careful

Generally, everyday clothing is not an allowable expense, even if you wear it for work.

But you can claim for:

• Protective clothing (boots, safety gear)

• Costumes or outfits required for creative roles (actors, entertainers)

Unless it’s wholly for your freelance role, HMRC won’t allow it.

9. Meals & Entertaining

This is an area HMRC monitors closely.

You CAN claim:

• Meals taken during business travel

• Meals at client meetings in certain conditions.

You CANNOT claim:

• Regular lunches

• Entertainment costs for clients

• Alcohol or personal meals

10. Subscriptions & Digital Tools

Almost every freelancer pays for platforms or services that support their workflow.

Examples include:

• Canva, Figma, editing tools

• AI tools (e.g., ChatGPT for business use)

• Domain renewals

• Website maintenance

• Project management software (Asana, Notion, Trello)

These are fully allowable as long as they directly support your freelance work.

Why Tracking Expenses Matters for 2026

With the 2026 tax year approaching, keeping organised records will help you:

• File your tax return faster

• Avoid HMRC penalties

• Maximise legitimate tax savings

• Maintain clear financial visibility

Don’t leave this until the last minute. Good bookkeeping pays off.

Need Help With Your 2026 Tax Return?

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