One of the most common things we hear from Glasgow sole traders coming to us for the first time is some version of the same sentence: ‘I think I might be missing expenses.’ They are almost always right.

HMRC allows sole traders to deduct a wide range of allowable expenses from their income before calculating their tax bill. Every legitimate expense you claim reduces your profit, which reduces both your Income Tax and your Class 4 National Insurance. The rules are specific — but so are the savings.

This guide covers every major expense category a sole trader in Glasgow can claim in 2026/27, what is and is not allowed within each category, and the common mistakes that either leave money on the table or create problems with HMRC.

The Golden Rule: Wholly and Exclusively for Business

HMRC’s test for an allowable expense is whether it was incurred ‘wholly and exclusively’ for the purposes of your business. This is the rule that governs every expense category and it has two important implications.

First, if an expense has a dual purpose — partly business, partly personal — you can only claim the business proportion. You cannot claim your entire phone bill if you also use the phone personally, but you can claim a reasonable business percentage.

Second, if an expense has any personal element mixed in with the business element in a way that cannot be separated, HMRC may disallow it entirely. This is why keeping clear records of the business purpose of each expense matters.

Travel and Mileage — One of the Most Underclaimed Categories

Business travel is one of the most commonly underclaimed expense categories for Glasgow sole traders. The rules are specific but the savings are significant.

Mileage (if you use your own vehicle):

• 45 pence per mile for the first 10,000 business miles in the tax year — 2026/27 rates
• 25 pence per mile for business miles above 10,000 in the same tax year
• 24 pence per mile for motorcycles
• 20 pence per mile for bicycles

You cannot claim actual vehicle costs (fuel, insurance, servicing) if you use the mileage rate — it is one
or the other, not both. For most sole traders with modest business mileage, the mileage rate is simpler
and equally effective.

Public transport and other travel:

• Train fares, bus fares, and taxi costs for business travel — fully claimable
• Parking fees at business destinations — claimable
• Congestion charges and road tolls for business journeys — claimable
• Hotel accommodation for genuine business travel away from your normal base — claimable

What you cannot claim: your normal commute between home and a fixed place of work. If you have a regular workplace you travel to, those journeys are personal, not business travel. If you work from home with no fixed external workplace, most business travel from your home address is claimable.

Home Working Costs — Two Ways to Claim

If you work from home as a sole trader — which covers the majority of self-employed people in Glasgow — you can claim a portion of your household running costs. There are two methods.

Method 1 — Flat Rate (simplest):

HMRC allows a flat rate deduction based on the number of hours you work from home per month:

• 25 to 50 hours per month: £10 per month
• 51 to 100 hours per month: £18 per month
• 101 or more hours per month: £26 per month

This method requires no receipts or calculations — you simply claim the relevant amount based on
your working hours.

Method 2 — Actual Costs (potentially larger):

Alternatively, you can calculate the business proportion of your actual household running costs:

• Count the total number of rooms in your home
• Identify the room or space used for business
• Claim that proportion of heating, electricity, mortgage interest or rent, broadband, and other
  household bills.

For example, if you have a five-room home and use one room exclusively for business, you can claim 20% of eligible household costs. This method requires records and receipts but typically produces a larger deduction for sole traders with significant home office usage.

Equipment and Technology — Capital Allowances and Annual Investment Allowance

Equipment you buy for your business is claimable, but the rules depend on whether you use the simplified cash basis or the traditional accounting method.

Under the cash basis (most sole traders):

• Equipment costs are deductible in the year of purchase — laptops, cameras, tools, printers, desks, chairs, and other business assets
• If the item is used partly for business and partly personally, claim the business proportion only

Under traditional accounting:

• Capital allowances apply — the cost is spread over time rather than deducted in full in year one
• The Annual Investment Allowance (AIA) allows most equipment costs to be deducted in full in the year of purchase, up to the AIA limit

If you are unsure which method applies to you, the cash basis is the default for most sole traders with income under the VAT threshold. It is simpler and allows immediate deduction of equipment costs.

Phone and Broadband — Claiming the Business Proportion

If you use your personal phone or home broadband for business purposes, you can claim the business proportion of the cost — not the full amount.

For example, if you use your phone 60% for business and 40% personally, you can claim 60% of your monthly phone bill as a business expense. The proportion should be based on genuine usage and defensible if HMRC asks.

If you have a phone contract that is entirely for business use — a dedicated business SIM with no personal use — the full cost is claimable.

Professional Services — Accountancy, Legal, and Subscriptions

• Accountancy and bookkeeping fees — fully claimable, including the cost of preparing your Self Assessment return
• Professional legal advice for business purposes — claimable (personal legal matters are not)
• Professional subscriptions and membership fees — claimable if directly related to your trade or profession
• Licences required for your business activity — claimable
• Business insurance premiums — fully claimable

This is worth emphasising: the fee you pay to 1341 Accountancy to prepare your tax return is itself a claimable business expense. Professional advice pays for itself in the deductions it secures — and the fee reduces your profit before tax.

Marketing, Advertising, and Website Costs

• Social media advertising — Meta ads, Google ads, LinkedIn ads — fully claimable in the year of spend
• Website hosting and domain registration — claimable
• Website design and development costs — claimable
• Business cards, flyers, and printed marketing materials — claimable
• Photography or videography for business use — claimable
• Software subscriptions used for marketing — Canva, Adobe, Mailchimp, scheduling tools — claimable

Find out how 1341 Accountancy helps sole traders claim every allowable marketing expense — visit our Sole Trader Accounting page.

Training and Professional Development

Training costs are claimable when they update or maintain skills you already use in your business. They are not claimable when they enable you to enter a new profession or trade.

• A web designer taking an advanced CSS course — claimable
• A bookkeeper taking an updated accounting software course — claimable
• A sole trader taking a driving test to be able to drive for the first time — not claimable (enables new skill, not update of existing)

Books, publications, journals, and online courses directly related to your trade are generally claimable under the same principle.

Pre-Trading Expenses — What You Spent Before You Launched

Many sole traders in Glasgow do not realise that expenses incurred before they officially started trading can be claimed as if they were incurred on the first day of trading. This applies to costs in the seven years before your business started.

Common pre-trading expenses that can be claimed include:

• Equipment purchased before launch
• Professional advice received before trading began
• Website development costs incurred pre-launch
• Training completed before the business started
• Travel costs for research or preparation before trading

If you started your business recently and have not reviewed your pre-trading expenses, this is often a significant missed opportunity — particularly for businesses that required investment in equipment or training before they could operate.

What You Cannot Claim as a Sole Trader

Common expenses that are not allowable — these are frequently claimed incorrectly and can attract HMRC attention:

• Personal clothing — even if you only wear it for work. HMRC requires clothing to be a uniform protective clothing, or a costume to be claimable. Standard professional clothing is not allowable.
• Food and drink for yourself while working — with very limited exceptions for travel away from your normal base
• Fines and penalties — parking fines, HMRC penalties — not claimable
• Your commute from home to a fixed place of work
• Personal expenses mixed with business expenses that cannot be separated
• Capital repayments on loans — you can claim the interest but not the repayment of capital

Keeping Records — What HMRC Requires

You are required to keep records of all business income and expenses for at least five years after the 31 January submission deadline for the relevant tax year. For the 2024/25 tax year, records must be kept until at least 31 January 2031.

What to keep:

• Invoices for all income received
• Receipts for all business purchases
• Bank statements covering all business transactions
• Mileage logs if claiming business mileage
• Records of home working hours if using the flat rate method

Under Making Tax Digital, sole traders with qualifying income above £50,000 are now required to keep these records digitally using HMRC-approved software. The threshold drops to £30,000 from April 2027.

Find out how 1341 Accountancy helps sole traders keep compliant digital records — visit our Bookkeeping and Software Support page.