What You Can (and Can’t) Claim as a Business Expense in 2025

What You Can (and Can’t) Claim as a Business Expense in 2025

Running a small business comes with plenty of moving parts, and managing expenses is one of the most important. Knowing exactly what you can (and can’t) claim as a business cost helps you stay compliant with HMRC while keeping your tax bill as low as possible.

With the 31 January 2026 Self Assessment deadline approaching, now’s a great time to review your expenses and make sure everything’s in order. Here’s a clear, up-to-date guide to what qualifies as a legitimate business expense in the UK.

What Counts as a Business Expense?

HMRC’s rule is simple:

An expense must be “wholly and exclusively” for business use.

If something is used for both business and personal purposes, you can usually only claim the business portion.

Let’s break down what that means in practice.

What You Can Claim as a Business Expense

1. Office and Workspace Costs

Whether you rent an office, use a co-working space, or run your business from home, you can usually claim:

• Office rent, utilities, and business rates

• Co-working memberships or desk hire

• A proportion of home bills if you regularly work from home

Tip: HMRC also offers a simplified home-working rate if you’d prefer not to calculate exact costs.

2. Travel and Transport

Business travel is deductible as long as it’s not part of your ordinary commute.

You can claim for:

• Business mileage (currently 45p per mile for the first 10,000 miles)

• Public transport costs, parking, and tolls

• Fuel, servicing, and insurance for business-only vehicles

You can’t claim your normal commute, even if you’re self-employed.

3. Equipment, Tools, and Technology

Items you buy to help run your business are usually allowable:

• Laptops, phones, printers, and office furniture

• Software and subscriptions (e.g. Xero, Canva, QuickBooks)

• Tools and machinery specific to your trade

Larger purchases may fall under capital allowances, meaning you claim them over time rather than all at once.

4. Marketing and Advertising

Most marketing and promotional costs are fully deductible, including:

• Paid ads (Google, Meta, print, etc.)

• Website design, hosting, and maintenance

• Photography, videography, and graphic design

• Business cards, leaflets, and signage

5. Professional and Financial Services

You can claim expenses that help keep your business compliant and running smoothly:

• Accountancy and bookkeeping fees

• Legal or consultancy services

• Bank charges and payment processing fees

• Business insurance

6. Staff and Subcontractor Costs

If you employ people or outsource work, you can claim:

• Salaries and wages

• Employer National Insurance contributions

• Freelancer and subcontractor costs

• Staff training and development

7. Stock and Supplies

For product-based businesses:

• Materials and components

• Product packaging

• Postage and courier fees

What You Can’t Claim as a Business Expense

1. Personal Expenses

Clothing, meals, or non-branded items aren’t deductible unless they’re essential for your job (e.g. uniforms or safety gear).

2. Client Entertainment

Meals, drinks, or events with clients are not allowable, even if the purpose is business-related.

3. Fines and Penalties

Speeding fines, parking tickets, and late tax penalties cannot be claimed.

4. Your Own Pay

• Sole traders: you cannot claim your own drawings

• Limited companies: you can claim director salaries, but not dividends

5. Non-Business Travel

If a trip includes both business and personal time, only the business portion is claimable.

Keep Clear Records

Good bookkeeping makes everything easier. Keep receipts and invoices for every expense, and store your records for at least:

Five years after the 31 January deadline.

Using accounting software like Xero, Sage, or QuickBooks can help you track spending automatically and avoid missing deductible costs.

Commonly Missed Expenses

• Professional memberships and trade subscriptions

• Business insurance

• Charity donations made via a limited company

• Mobile phone bills (business portion only)

Getting It Right

Getting your expenses right makes a real difference to your profits and your peace of mind. The key is simple: claim what’s genuinely business-related and keep accurate records.

And if you’re ever unsure, don’t go it alone. Speaking with a local accountant who understands how Norwich businesses run can save you time, money, and stress.

At Perk Accountants, our friendly team is always here to help you stay compliant, maximise your claims, and avoid any unwanted surprises from HMRC.