Business Expenses for Tradespeople UK — What You Can Claim (2026)

Every pound you spend running your trade is a pound that should reduce your tax bill — but only if you know the rules. HMRC allows tradespeople to deduct a wide range of costs from their income before tax is calculated. Get it right and you could save thousands a year. Get it wrong and you're either paying more tax than you need to, or — worse — claiming things you're not entitled to and triggering an investigation. This guide covers every major category, including what HMRC will not allow and how to keep records that will hold up if your returns are ever examined.

The golden rule: wholly and exclusively

Every allowable expense test comes down to the same four words: wholly and exclusively for the purposes of the business. That is the phrase HMRC uses, and it matters. An expense is claimable if — and only if — it was incurred entirely for business purposes.

Where an expense is partly business and partly personal, you cannot claim the full amount, but you can claim the business proportion. Your mobile phone bill is the classic example: if you use your phone 60% for work and 40% personally, you can claim 60% of the bill as an expense. The same logic applies to your van if you occasionally use it for personal trips, or your home broadband if you use it for business purposes as well.

HMRC expects you to arrive at that split honestly and to be able to justify it if asked. Keep a record of how you calculated the business proportion, and review it each year if your usage changes significantly.

Tools and equipment

Hand tools, power tools, test equipment, ladders, toolboxes, tape measures — anything you use to do the work itself is a legitimate business expense. The rule on how you claim depends on the cost:

• Under £1,000: claim as an expense in the year of purchase. It comes straight off your profit before tax is calculated.
• Over £1,000: claim via the Annual Investment Allowance (AIA), which is a capital allowance that lets you deduct the full cost in the year you buy it. The AIA limit is £1,000,000 per year — far above anything most sole traders will ever spend — so in practice the full cost of any tool or piece of equipment is deductible in the year of purchase.

One distinction worth knowing: if you repair a tool, that cost is an expense in the usual way. If you replace it with a new one, that is also treated as an expense (not a capital item), because you are maintaining your existing capability, not improving it.

If a tool is used for both business and personal purposes — say a drill you occasionally lend to family — apportion accordingly. For most tradespeople, tools are 100% business use, which keeps things simple.

Van and vehicle costs

Your van is likely one of your biggest expenses, and HMRC gives you two methods for claiming it. You must choose one method and stick with it for the life of each vehicle.

Method 1 — Actual costs: claim the real costs of running the vehicle. This includes fuel, insurance, servicing, road tax, MOT, tyres and repairs. If the van is used exclusively for business, claim 100%. If you use it for any personal journeys, calculate the business percentage (business miles ÷ total miles) and apply that proportion to each cost category.

Method 2 — HMRC simplified mileage rates: instead of tracking individual costs, you claim a flat rate per business mile driven. The current rates are 45p per mile for the first 10,000 business miles in a tax year, then 25p per mile for every mile above that. This rate covers all costs — fuel, wear and tear, insurance — so you cannot claim anything else on top of it if you use this method.

For most tradespeople who use their van heavily, actual costs will produce the larger deduction. The mileage rate suits lower-mileage use of a personal car more than a full-time work van.

Whichever method you choose, parking fees and congestion charges are separately claimable on top — they are not covered by the mileage rate. Parking fines and penalty notices are never claimable; HMRC considers these penalties for breaking the law, not legitimate business costs.

Materials and stock

Materials you buy and use on a client's job are fully allowable as business expenses — pipes, cables, plasterboard, fixings, paint, whatever the job requires. The key timing rule is that you can only claim for materials in the period when they are used, not simply when they are purchased.

If you buy a batch of materials at the end of a tax year but they sit in your van or workshop until the following year, they count as stock and cannot be claimed until they are used on a job. For most tradespeople who buy to order rather than holding significant inventory, this is not a practical problem. But if you bulk-buy supplies, be aware that unused stock at your year-end is not deductible.

Workwear and PPE

This is an area that catches people out. The rule is simple but counterintuitive: clothing is only claimable if it is work-specific and could not reasonably be worn in everyday life.

Claimable: hi-vis vests, hard hats, steel-toe-cap safety boots, overalls, gloves, respiratory protection, ear defenders, harnesses, and branded workwear bearing your company name or logo.

Not claimable: jeans, T-shirts, trainers, fleeces or any other item of ordinary clothing — even if you wear them exclusively on site and would never wear them socially. HMRC's position is that such clothing has a dual purpose by its nature, regardless of how you personally use it. This is a point HMRC has successfully defended in tribunal cases, so do not try to claim it.

Washing and maintenance costs for claimable workwear are also deductible. HMRC publishes a flat-rate laundry allowance for some trades, but keeping receipts for actual costs is straightforward and often more accurate.

Insurance

Business insurance premiums are fully claimable. The main policies relevant to tradespeople include:

• Public liability insurance — covers damage or injury to third parties caused by your work
• Employer's liability insurance — legally required if you have employees or labour-only subcontractors
• Van insurance (business use) — the business-use component of your van insurance; if the policy is solely for a business vehicle, the full premium is claimable
• Tools and equipment insurance — covers your tools against theft or damage
• Professional indemnity insurance — covers claims arising from advice or designs you provide, relevant for surveyors, engineers and some specialist trades
• Income protection insurance — generally not claimable as a business expense, as it replaces personal income rather than covering a business cost

Training and qualifications

The rules here are nuanced and matter because the sums involved can be significant. The principle is:

• Claimable: courses that maintain or update skills you already have. Refresher training, first aid renewals, product-specific manufacturer training, health and safety updates, CSCS card renewals — all allowable.
• Not claimable: courses that give you an entirely new qualification or skill set. A plumber training to become a gas engineer, or an electrician studying for a structural inspection qualification — HMRC treats these as capital expenditure rather than a revenue expense, because they create a new income-earning capability rather than maintaining an existing one.

The line between “updating existing skills” and “acquiring new skills” can be blurry. If you are unsure, take advice from your accountant before claiming. The cost of getting it wrong — both financially and in terms of HMRC scrutiny — can outweigh the saving.

Phone and internet

If you have a dedicated business phone that you do not use for personal calls, the entire bill is claimable. This is the cleanest arrangement and the easiest to justify.

If you use a single phone for both business and personal use, you can claim the business proportion of the bill. Estimate your business usage honestly — most sole traders who rely on their phone for quoting, customer contact and supplier calls will have a legitimate claim of 60–80%. Document your estimate and stick with it consistently year to year.

Home broadband is treated the same way: if you use it partly for business, claim the business proportion. A typical claim for a sole trader who uses the internet for invoicing, emails and research might be 30–50% of the monthly bill.

Accounting and professional fees

The costs of running the financial side of your business are fully deductible:

• Accountant fees — for preparing your Self Assessment return, bookkeeping or general tax advice
• Bookkeeping and invoicing software subscriptions — Xero, QuickBooks, Trade2Base and similar tools used to manage your business finances
• Bank charges on a dedicated business bank account — monthly fees, transfer fees and similar charges are claimable. Charges on a personal account used for business are more difficult to argue and best avoided by keeping a separate business account.
• Legal fees directly related to business matters — chasing a debt, reviewing a commercial contract or dealing with an employment issue. Legal fees of a personal nature are not claimable.

Marketing and advertising

Any cost incurred to attract or retain customers for your trade is a claimable business expense. This includes:

• Website design, hosting and domain name registration
• Google Ads and Facebook Ads campaigns
• Checkatrade, MyBuilder, Rated People and similar lead platform subscriptions
• Flyers, leaflets, business cards and vehicle signwriting
• Direct mail campaigns
• Photography or video for a portfolio or social media

Client gifts are only claimable up to £50 per recipient per year, and only if the gift carries a conspicuous advertisement for your business (a branded pen or calendar, for example). Cash gifts, alcohol and food are not claimable as advertising regardless of value.

Business premises

If you rent a workshop, yard or storage unit for business use, the full rent and associated utilities are claimable. If the premises are used exclusively for business, there is no apportionment needed.

If you work from home — using a room for estimating, admin, quoting and record-keeping — you can claim a proportion of your household costs. HMRC offers two routes:

• Fixed monthly rate (simplified expenses): £10/month if you work from home for 25–50 hours per month; £18/month for 51–100 hours; £26/month for 101+ hours. No receipts needed beyond a log of your hours.
• Actual proportion: calculate the business percentage of your home — typically based on the number of rooms used for business as a fraction of total rooms — and apply that percentage to actual costs (mortgage interest or rent, council tax, gas, electricity, broadband). This requires more record-keeping but can produce a larger deduction if you use a significant part of your home for business.

If you claim the actual proportion of mortgage interest, be aware this can create a capital gains tax complication when you sell your home. Most sole traders with modest home-working use the simplified rate to avoid this.

What you cannot claim

Knowing what is not deductible is just as important as knowing what is. HMRC takes a dim view of inflated expense claims, and the following are commonly claimed incorrectly:

• Fines and penalties — parking fines, speeding fines, HMRC late-filing penalties. None of these are claimable. The principle is that you cannot reduce your tax bill by deducting the cost of breaking the law.
• Business entertaining — taking clients or subcontractors out for a meal, drinks or an event is not deductible for sole traders. This is a firm rule and does not depend on how genuinely business-related the occasion was.
• Client gifts over £50 — or any gift of food, drink or cash regardless of value.
• Travel between home and a permanent workplace — commuting is not a business expense. If you drive to a fixed yard or depot each morning and then to job sites, the home-to-yard leg is not claimable. Travel from the yard to job sites is claimable. If you work from home and drive directly to job sites, the full journey is claimable.
• Ordinary clothing — as covered above, regular clothes are not claimable even if worn exclusively for work.
• Personal expenses mixed into business accounts — a personal purchase paid from a business account does not become a business expense. HMRC looks at the nature of the transaction, not which account it came from.

Keeping records that survive an inspection

HMRC can open an enquiry into any Self Assessment return at any time within 12 months of the filing deadline. If they suspect errors or fraud, they can go back further — up to 20 years in serious cases. The practical implication is that you need to keep your records for at least 5 years after the 31 January filing deadline for the relevant tax year. For the 2025–26 tax year (return due January 2027), keep your records until at least January 2032.

What does HMRC expect to see? For every expense you claim, you need evidence:

• Receipts for all purchases — paper or digital. A bank statement alone is generally not sufficient; HMRC wants to see what was actually bought.
• Invoices from suppliers and subcontractors.
• Mileage log if you claim vehicle costs using the flat rate — dates, destinations, purpose and miles for each journey.
• Apportionment workings for mixed-use expenses like phone and broadband — a simple note explaining how you calculated the business percentage.

The simplest system is to photograph every receipt as soon as you get it and store it in a folder organised by tax year. Apps like Dext or Hubdoc can automate the extraction and categorisation. If you use Trade2Base, expenses can be logged against jobs as they happen, so your records are always current and organised without any end-of-year scramble.

The goal is not perfection — the occasional missing petrol receipt is not a disaster. The goal is a credible, consistent record that shows HMRC you have made a genuine effort to capture your costs accurately. If an inspector sees systematic receipts, organised folders and a coherent set of accounts, they are far less likely to probe further than if they encounter a shoebox of paper and a best-guess total.