Running a small business in the UK means watching every penny. But what if some of the business expenses you are already paying for could bring down your tax bill?
The good news is, they might. In this guide, we are breaking down business expenses you can actually claim in the UK, including a few that often get missed.
Spoiler alert, it is not just printer paper and mileage.
What Business Expenses Can You Actually Claim?
Before we dive into examples, here’s the golden rule:
If it’s “wholly and exclusively” for business, it’s likely claimable.
That means the cost must be only for your work – not a mix of business and personal. If there is a mix, you might still be able to claim a portion of it. (We’ll cover that in a sec.)
Let’s break down the surprising day-to-day costs you might be missing out on.
1. Working from Home? You Can Claim More Than You Think
If you run your business from home, there are some household costs you might be able to claim such as part of your rent, energy bills or internet.
What you can claim depends on whether you are a sole trader or a limited company.
Each guide explains what you can claim and how to do it properly.
2. Your Mobile and Internet Bills
If you use your phone or internet for business, you can claim a portion of those costs too.
Sole traders: Claim the business percentage. So if you use your phone 60% for work, you can claim 60% of the bill. You will need proof that these costs are genuinely higher because of your business. For example, you might need to show a phone bill breakdown with work-related calls, or explain why you upgraded your broadband package to handle large file uploads or video calls.
Limited companies: Best to have a separate business contract in the company’s name. If not, only the business-use portion can be reimbursed without triggering a benefit-in-kind charge.
Tip: Keep a sample log for a few weeks to estimate your business use – HMRC may ask for it.
3. Subscriptions and Tools You Actually Use
Paying for software, apps or subscriptions to help you run your business? If they’re essential, they’re likely deductible.
Some examples:
Xero or a Xero partner app (like Dext for receipts)
Canva or Adobe (for designers or marketers)
Microsoft 365 or Google Workspace
Trade magazines or business memberships
What doesn’t count? Netflix, even if you watch documentaries for “inspiration”.
4. Coffee Shops, Co-working Spaces and Travel Snacks
Working away from home? Some of those costs may be claimable, but not all of them are treated the same.
Co-working spaces that you pay for separately (like WeWork or a local hub) can usually be claimed as a business cost. These are proper workspaces, and HMRC treats the fee like office rent. You will need a receipt or invoice.
Coffee shops, on the other hand, are a bit different. Just buying a drink and working from a café does not count as office rent. You are not paying for space, so it is not usually an allowable workspace expense.
That said, if you are travelling for business and stop for coffee or a quick lunch, you might be able to claim that as subsistence. And if you meet a client, you can claim your part of the bill but not theirs.
Everyday coffees at your usual café are not claimable if you just prefer working there instead of at home. HMRC sees that as personal choice.
5. Clothing, But Only the Right Kind
You can’t claim your usual wardrobe, even if you “only wear it for work.” But you can claim:
Branded uniforms
Protective gear (like steel-toe boots or hi-vis jackets)
Costumes (actors, performers etc.)
No claims for your smart blazer, even if it’s your “client meeting” outfit. Sorry!
6. Mileage Counts Even for Short Trips
If you use your personal car for business journeys, you can claim mileage to cover the cost of fuel, wear and tear, and insurance.
45p per mile for the first 10,000 miles
25p per mile after that
Just remember, this only applies to business journeys. You cannot claim anything for your usual commute.
Xero tip: Use Xero Expenses or a partner app like Tripcatcher to track your mileage automatically.
Free download: Want to keep things simple?
Grab our free mileage tracker to log your business trips and make tax time easier.
Download your free mileage tracker
How to Stay on Top of It All
Claiming the right business expenses you can actually claim in the UK can really add up, but only if you track them properly.
Here’s how to keep it simple:
Use Xero and Hubdoc to snap receipts and tag expenses straight from your phone
Set up bank feeds so all your transactions appear in real time
Talk to your accountant if you’re not sure what’s allowed — they can save you money and stress
Bookkeeping Spreadsheet – Stay Organised and Tax Ready All Year Round
Tired of scrambling at tax time? Our easy to use Bookkeeping Spreadsheet is perfect for UK sole traders and small business owners who want to take control of their finances without the faff.
It includes everything you need to stay on top of your income, expenses and mileage, all in one place. Whether you’re just starting out or want to simplify how you track things, this tool will help you feel more confident and in control.
Download your Bookkeeping Spreadsheet today for just £25 and make managing your money feel easy.
If You Are Not Sure, Ask
It is always better to check than to miss out. HMRC does not expect perfection, but they do expect honesty. If something feels unclear, get advice or keep a short note to explain why you claimed it.
Claiming the right everyday expenses can lower your tax bill and increase your profits. A quick review of your regular spending could make a big difference.
Want to feel more confident about what you can claim?
We are happy to help. Book a free call with us and let us take the stress out of your business finances.
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