What Business Expenses Can I Claim?

The Complete UK Guide for Limited Companies, Sole Traders and Partnerships

Last updated: July 2026

Wondering whether something is a legitimate business expense? This guide explains what you can and can’t claim, how HMRC’s rules work, and the most common mistakes businesses make.

Contents

• The golden rule
• Quick reference table
• Office equipment
• Software and subscriptions
• Phones and broadband
• Home office expenses
• Travel and subsistence
• Vehicles and mileage
• Staff costs
• Clothing
• Marketing and advertising
• Professional fees
• Gifts and entertaining
• Frequently asked questions

The Golden Rule

Most business expenses are tax deductible if they are incurred wholly and exclusively for the purposes of your business.

In simple terms, ask yourself:

• Was the expense incurred because of the business?
• Would I have bought it if I wasn’t running the business?
• Can I prove the purchase if HMRC ask?

If the answer to all three questions is yes, there’s a good chance the expense is allowable.

Some expenses have additional rules, which we’ll explain throughout this guide.

Remember: Just because something is paid from your business bank account doesn’t automatically make it tax deductible.

Quick Reference Guide

Office Equipment

One of the most common questions we receive is:

“Can I buy equipment through my business?”

In many cases, the answer is yes.

Computers and Laptops

Usually allowable.

Examples include:

• Desktop computers
• Laptops
• Tablets used for work
• Monitors
• Docking stations
• Keyboards
• Mouse
• Webcams
• Printers
• Scanners

These purchases are normally treated as capital assets, but most businesses can obtain full tax relief through capital allowances.

Example

Sarah runs a graphic design company.

She buys:

• Laptop – £1,300
• Monitor – £250
• Docking station – £180

All are purchased solely for business use.

Result: These would normally qualify for tax relief.

Office Furniture

Usually allowable.

Examples:

• Office desks
• Ergonomic chairs
• Filing cabinets
• Bookshelves
• Office lighting
• Whiteboards

Furniture purchased for genuine business use is generally deductible.

Standing Desks

Yes.

Standing desks have become increasingly popular and are generally allowable where purchased for business use.

The same applies to:

• Monitor arms
• Laptop risers
• Footrests
• Ergonomic keyboards
• Wrist supports

Cameras

Often allowable if required for your business.

Examples include:

• Photographers
• Estate agents
• Marketing agencies
• Surveyors
• Construction businesses
• Online retailers

Buying an expensive camera purely for personal photography would not qualify.

Drones

Sometimes.

A drone used for:

• surveying
• photography
• videography
• inspections
• agriculture

may qualify.

A drone bought mainly for personal enjoyment would not.

Coffee Machines

This is one of the questions accountants hear surprisingly often.

If the coffee machine is provided for employees in the workplace, it’s generally allowable.

If it’s mainly for your personal enjoyment at home, HMRC could challenge the claim.

TVs

Sometimes.

Examples where a TV could be allowable include:

• waiting rooms
• conference rooms
• presentations
• digital signage
• video production

Buying a television for your living room and calling it a business expense would almost certainly fail the HMRC test.

Books

Professional books are generally allowable.

Examples include:

• tax manuals
• engineering manuals
• legal reference books
• industry publications

Novels and general-interest books would not normally qualify.

Tools and Equipment

Tradespeople can usually claim equipment such as:

• drills
• saws
• ladders
• toolboxes
• testing equipment
• measuring devices
• safety equipment

Provided they’re purchased for business purposes.

Software and Online Services

Software is usually straightforward.

Most subscriptions used to run your business are allowable.

Examples include:

• Accounting software
• Payroll software
• Microsoft 365
• Google Workspace
• Adobe Creative Cloud
• Canva Pro
• Zoom
• Dropbox
• OneDrive
• Antivirus software
• Password managers
• Cloud storage

AI Subscriptions

Artificial intelligence tools are becoming common business expenses.

Examples include:

• ChatGPT
• Microsoft Copilot
• Claude
• Gemini
• Perplexity

Where they’re used for business activities, subscriptions are generally allowable.

Website Costs

Most website costs are deductible.

Examples include:

• Domain registration
• Website hosting
• Website maintenance
• SSL certificates
• Email hosting

Building an entirely new website may have different tax treatment depending on the circumstances, but in practice most small businesses receive tax relief.

Mobile Apps

Business apps are normally allowable.

Examples:

• Mileage trackers
• Receipt scanning apps
• CRM software
• Calendar apps
• Time recording software
• Project management software

Online Memberships

Business memberships are generally allowable where they relate to your trade.

Examples:

• Professional bodies
• Industry associations
• Business networking groups
• Technical resources

Purely personal memberships are not deductible.

Before Buying Anything

Before making a purchase, ask yourself these three questions:

✅ Is it wholly and exclusively for the business?

✅ Can I explain to HMRC why the business needed it?

✅ Do I have evidence of the purchase?

If the answer is yes to all three, it’s often a good indication that the expense will qualify.

Next: In Part 2 we’ll cover phones, broadband, home office costs, travel, hotels, meals, mileage, company cars and electric vehicles.

Phones, Broadband, Home Working and Travel Expenses

These are some of the most misunderstood business expenses. The rules depend on who owns the asset, how it’s used, and whether there is any personal benefit.

Mobile Phones

Can I claim my mobile phone?

Usually, yes.

The tax treatment depends on who owns the phone contract.

Company-owned contract

This is generally the simplest option.

If your limited company takes out the contract and pays the bill:

• ✅ Monthly line rental is usually allowable.
• ✅ Calls, texts and data are usually allowable.
• ✅ The handset is usually allowable.
• ✅ Private use is generally ignored for one phone per employee or director.

For most company directors, this is the most tax-efficient arrangement.

Personal contract

If the contract is in your personal name, the rules are different.

Business calls can usually be reimbursed by the company, but the monthly line rental cannot normally be claimed, because you would be paying it anyway for personal use.

Example

John pays £45 per month for his personal mobile phone.

He uses it for business and personal calls.

The company can usually reimburse the identifiable business calls, but not the entire £45 monthly contract.

Additional Phones

A second business phone may also be allowable where there is a genuine business need.

Examples include:

• Separate work number
• International business
• Testing mobile apps
• Different operating systems

Broadband

Can I claim my home broadband?

It depends.

Company broadband

If your company arranges and pays for the broadband contract primarily for business purposes, the cost is generally allowable.

Personal broadband

If you already had broadband before starting your business, you generally cannot simply claim the whole bill.

You may be able to claim the additional business costs, but not the personal element.

Business Premises

Broadband installed at business premises is generally fully deductible.

Home Office Expenses

Many businesses operate partly or entirely from home.

HMRC allows tax relief, but there are different methods depending on your circumstances.

Sole Traders

You can usually choose between:

• simplified expenses
• claiming a proportion of actual household costs

Examples include:

• electricity
• gas
• internet
• insurance
• council tax
• rent
• mortgage interest (where applicable)

The business proportion should be reasonable.

Limited Companies

The rules differ.

You may:

• claim certain costs directly
• reimburse allowable expenses
• have a formal licence agreement in some situations

Professional advice is worthwhile if you work from home permanently.

Office Equipment at Home

Equipment used for your business is normally allowable even if you work from home.

Examples include:

• desk
• chair
• monitor
• printer
• filing cabinet
• lighting

Internet and Streaming Services

Can I claim Netflix?

Usually no.

Although there are exceptions for certain creative businesses, Netflix is normally regarded as personal expenditure.

Spotify

Generally no, unless there is a genuine business purpose.

A shop playing background music should instead ensure it has the appropriate commercial music licences.

Business Streaming

Subscriptions used directly within your business activities may qualify.

Examples include:

• educational platforms
• industry training
• technical libraries
• stock photography
• stock video

Travel Expenses

Business travel is usually allowable.

Ordinary commuting is not.

Understanding the difference is extremely important.

Business Journeys

Examples include:

• Visiting clients
• Visiting suppliers
• Travelling between workplaces
• Business meetings
• Conferences
• Training courses
• Temporary workplaces

These journeys are usually allowable.

Ordinary Commuting

Travel between:

Home ↔ Permanent Workplace

is normally not tax deductible.

This applies even if you own the business.

Temporary Workplaces

Travel to a temporary workplace is often allowable.

There are detailed rules, including the well-known 24-month rule, so seek advice if you’re working at another location for an extended period.

Hotels

Hotel accommodation during business travel is generally allowable.

Examples:

• Overnight client meetings
• Conferences
• Trade exhibitions
• Multi-day training
• Working away from your normal area

Luxury upgrades for personal reasons may not qualify.

Parking

Business parking charges are generally allowable.

Examples include:

• Client visits
• Meetings
• Temporary workplaces

Congestion Charges and Toll Roads

Usually allowable where incurred during business journeys.

Examples:

• Congestion Charge
• Dart Charge
• Toll bridges
• Toll roads

Speeding Fines

These are never tax deductible.

The same generally applies to:

• parking fines
• fixed penalty notices
• penalties
• court fines

Even if the offence occurred during business travel.

Trains, Flights and Taxis

These are usually allowable where incurred for business purposes.

Examples include:

• Rail tickets
• Underground travel
• Flights
• Ferries
• Taxi fares
• Airport parking

Keep receipts wherever possible.

Food and Drink

One of the biggest areas of confusion.

Meals During Business Travel

Food purchased while travelling on business is often allowable.

Examples include:

• Breakfast during an overnight stay
• Lunch while attending a conference
• Evening meal when working away

The travel itself must qualify as business travel.

Everyday Lunches

Buying yourself lunch while working in your normal office is not normally allowable.

Everyone needs to eat, so HMRC generally regards this as personal expenditure.

Coffee

A coffee bought during a qualifying business journey will usually be treated the same as other subsistence costs.

Buying coffee every morning on your way to your normal workplace is generally a personal expense.

Mileage

If you use your own vehicle for business journeys, you can usually claim mileage.

The approved mileage rates cover costs such as:

• fuel
• servicing
• insurance
• depreciation

This means you cannot normally claim those costs separately when using the approved mileage method.

Electric Vehicles

Electric vehicles have become increasingly tax-efficient.

Depending on your circumstances, you may be able to claim relief for:

• charging costs
• business mileage
• capital allowances
• home charging equipment

If you’re considering buying an electric company car, it’s worth obtaining advice before making the purchase, as the tax savings can be significant.

Quick Checklist Before Claiming Travel

Before claiming travel costs, ask yourself:

• Was the journey necessary for my business?
• Was I travelling to a temporary workplace or client?
• Was this ordinary commuting?
• Have I kept receipts or mileage records?

If you can answer those questions confidently, claiming your travel expenses should be much easier.

Next: Part 3 covers company cars, business entertaining, staff costs, clothing, training, professional fees, insurance and marketing expenses.

Company Cars, Staff Costs, Marketing and Professional Expenses

Some business expenses are straightforward. Others depend on who benefits, whether there’s any personal use, or specific HMRC rules. This section covers the expenses that often generate the most questions.

Company Cars

Can my company buy a car?

Yes.

A limited company can purchase a car for business use, but the tax consequences depend on the type of vehicle and whether there is any private use.

If a director or employee uses a company car privately (including commuting), a Benefit in Kind (BIK) usually arises and tax may be payable.

Electric Company Cars

Electric cars are currently one of the most tax-efficient company vehicles.

Potential advantages include:

• Low Benefit in Kind rates
• Corporation Tax relief
• Possible VAT recovery in some situations
• Lower running costs

If you’re considering buying an electric vehicle through your company, it’s worth obtaining advice first, as the tax savings can be substantial.

Fuel

The rules depend on whether you’re using:

• your own vehicle
• a company vehicle
• approved mileage rates
• actual running costs

Fuel for business journeys is usually allowable.

Fuel for private journeys generally isn’t.

Charging an Electric Vehicle

Business charging costs are generally allowable.

Examples include:

• charging at work
• charging at public charging stations
• reimbursing business charging costs

Different rules apply depending on vehicle ownership.

Bicycles

A bicycle purchased for genuine business use may qualify for tax relief.

Many employers also use the Cycle to Work Scheme, which has separate rules.

Insurance

Most business insurance is tax deductible.

Examples include:

• Public liability insurance
• Professional indemnity insurance
• Employers’ liability insurance
• Cyber insurance
• Office insurance
• Contents insurance
• Business interruption insurance

Personal insurance policies are generally not deductible.

Professional Fees

Professional services used by your business are normally allowable.

Examples include:

• Accountant’s fees
• Bookkeeping
• Payroll
• Tax advice
• Solicitor’s fees
• Business consultants

Legal Fees

Some legal costs are deductible.

Examples include:

• Debt recovery
• Employment advice
• Commercial contracts
• Business disputes

However, legal costs relating to buying assets or acquiring businesses may be treated differently.

Bank Charges

Business banking costs are usually allowable.

Examples include:

• Monthly bank fees
• Merchant charges
• Card processing fees
• Foreign currency charges
• Payment platform fees

Interest

Business loan interest is often allowable.

Examples include:

• Business loans
• Overdraft interest
• Asset finance

Personal borrowing normally isn’t deductible unless it has been used for qualifying business purposes.

Marketing and Advertising

Marketing expenses are usually straightforward.

Examples include:

• Google Ads
• Facebook advertising
• LinkedIn advertising
• Printed leaflets
• Flyers
• Business cards
• Brochures
• Website design
• Logo design
• Photography
• Videography
• Search Engine Optimisation (SEO)

These costs are generally allowable.

Social Media

Costs associated with promoting your business online are normally deductible.

Examples include:

• Facebook
• Instagram
• LinkedIn
• TikTok
• YouTube
• X (formerly Twitter)

Advertising and content creation costs are usually allowable where incurred for business purposes.

Sponsorship

Business sponsorship is often allowable where it genuinely promotes your business.

Examples include:

• Local sports teams
• Charity events
• Community events

There should be a commercial benefit to the business.

Training

Training costs are usually allowable where they help you maintain or improve existing business skills.

Examples include:

• CPD courses
• Industry seminars
• Software training
• Compliance courses

Training that equips you for an entirely new trade or profession may not qualify.

Trade Subscriptions

Professional subscriptions are often allowable where they relate to your business.

Examples include:

• Professional bodies
• Industry associations
• Technical journals
• Business memberships

Staff Costs

Most genuine employee costs are deductible.

Examples include:

• Salaries
• Wages
• Bonuses
• Employer’s National Insurance
• Pension contributions
• Payroll costs

Staff Training

Training provided to employees is generally allowable.

Examples include:

• Technical training
• Health and safety
• First aid
• Professional qualifications
• Software training

Staff Uniforms

Uniforms are generally allowable.

Examples include:

• Branded polo shirts
• High-visibility clothing
• Safety boots
• PPE
• Protective clothing

Everyday Clothing

This surprises many people.

Normal clothing is not tax deductible.

Examples include:

• Business suits
• Shirts
• Dresses
• Shoes
• Coats

This applies even if you only wear them for work.

Safety Clothing

Protective clothing is usually allowable.

Examples include:

• Hard hats
• Gloves
• Steel toe boots
• Eye protection
• Hearing protection
• Respirators

Gifts to Employees

Employers can often provide gifts to staff.

Different tax rules apply depending on:

• value
• type of gift
• reason
• whether it’s available to everyone

Small gifts may qualify as trivial benefits, provided the relevant conditions are met.

Staff Parties

Many businesses can provide annual staff events without creating a tax charge.

Typical examples include:

• Christmas parties
• Summer BBQs
• Annual dinners

Conditions apply, including an annual cost limit per attendee.

Gifts to Customers

Customer gifts are a common area of confusion.

Some gifts are allowable.

Others aren’t.

The VAT and Corporation Tax rules are different, so it’s worth checking before making large purchases.

Business Entertaining

Can I claim meals with clients?

Usually no.

Business entertaining of customers and potential customers is generally not tax deductible for Corporation Tax purposes.

Examples include:

• Taking clients to lunch
• Restaurant meals
• Sporting events
• Theatre tickets
• Hospitality

Many business owners are surprised by this rule.

Staff Entertaining

Staff entertaining is different.

Events primarily for employees are generally allowable.

Examples include:

• Christmas parties
• Team lunches
• Staff events

Separate tax rules apply if directors attend with employees.

Charity Donations

Companies can often obtain tax relief on qualifying charitable donations.

Different rules apply depending on how the donation is made.

Professional Books

Reference books used within your profession are generally allowable.

Examples include:

• Tax manuals
• Engineering standards
• Legal texts
• Industry reference books

Novels and leisure reading are not.

Newspapers

Daily newspapers are generally regarded as personal expenditure.

However, specialist trade publications used within your business may qualify.

Magazines

Industry-specific magazines are often allowable.

Examples include:

• Construction journals
• Medical publications
• Engineering magazines
• Accounting updates

Before Claiming…

Ask yourself:

• Does this help my business earn income?
• Would I still buy it if I didn’t run the business?
• Is there any personal benefit?
• Can I explain it to HMRC?

If you’re unsure, it’s always safer to ask before submitting your accounts.

Next: Part 4 includes the most frequently asked questions, common mistakes, VAT considerations, record keeping tips and a final checklist.

Frequently Asked Questions About Business Expenses

Below are answers to some of the questions we’re asked most often.

Can I Claim Business Expenses Without a Receipt?

Sometimes.

HMRC doesn’t specifically require a receipt for every expense, but you must be able to prove the expense was genuine.

Alternative evidence might include:

• Bank statements
• Credit card statements
• Online order confirmations
• Invoices
• Booking confirmations

Where possible, always keep receipts.

If you’d like to know more, read our guide on claiming business expenses without a receipt.

Can I Claim Cash Purchases?

Yes, provided you have suitable evidence and the purchase was wholly and exclusively for your business.

Can I Claim Coffee?

Usually only if it’s part of qualifying business travel.

Examples that are normally allowable:

• Coffee while travelling to a client
• Coffee during an overnight business trip
• Refreshments while attending a conference

Buying your usual morning coffee on the way to your normal workplace is normally a personal expense.

Can I Claim Lunch?

It depends.

Usually allowable

• Lunch while travelling on business
• Lunch during an overnight business trip
• Lunch while attending a qualifying training course away from your normal workplace

Usually not allowable

• Lunch at your normal workplace
• Your everyday meal while working

Can I Claim Alcohol?

Sometimes.

Examples include:

• Staff Christmas parties
• Staff social events

Buying alcohol for yourself is generally a personal expense.

Alcohol purchased while entertaining clients is generally not tax deductible.

Can I Claim a Watch?

Usually no.

Even if you wear it while working, a watch is generally regarded as a personal item.

The same usually applies to:

• luxury watches
• smart watches
• fitness watches

Can I Claim Glasses?

Normally no.

Prescription glasses are generally regarded as personal.

There are limited exceptions for specialist safety eyewear required for work.

Can I Claim a Gym Membership?

Usually no.

Even if improved fitness helps your work, gym membership is normally regarded as a personal expense.

Can I Claim a Bicycle?

Sometimes.

A bicycle used for business journeys may qualify.

If you’re an employer, the Cycle to Work Scheme may also be worth considering.

Can I Claim My Internet?

It depends.

If it’s a business contract, usually yes.

If it’s your personal home broadband, only certain business costs may be claimable.

Can I Claim My Electricity Bill?

If you work from home, you may be able to claim an appropriate proportion of household running costs.

The exact calculation depends on whether you’re a sole trader or operate through a limited company.

Can I Claim My Mortgage?

Mortgage capital repayments are not a business expense.

Some home-working arrangements may allow relief for certain household costs, but professional advice is worthwhile before making significant claims.

Can I Claim a Holiday?

No.

A family holiday isn’t transformed into a business expense simply because you answer a few emails while you’re away.

However, genuine business travel may qualify.

Can I Claim Childcare?

Normally no.

Childcare is generally regarded as a personal expense.

There may be other government schemes available, but it isn’t usually a deductible business expense.

Can I Claim a TV Licence?

Only where it’s genuinely required for business purposes.

For most businesses, the answer will be no.

Can I Claim Spotify or Netflix?

Usually no.

These are generally regarded as personal subscriptions.

Creative industries may occasionally have different circumstances.

Can I Claim My Dog?

Almost certainly no.

There are limited exceptions for genuine working animals, but family pets are not business expenses.

Common Mistakes

Here are some of the most common errors we see.

❌ Claiming ordinary commuting.

❌ Claiming everyday clothing.

❌ Claiming client entertaining.

❌ Claiming personal shopping.

❌ Forgetting to keep receipts.

❌ Paying personal expenses from the company bank account.

❌ Assuming everything paid by the business is tax deductible.

Avoiding these mistakes can save both tax and unnecessary discussions with HMRC.

VAT and Business Expenses

Remember that Corporation Tax and VAT don’t always follow the same rules.

For example:

• An expense may be deductible for Corporation Tax but not qualify for VAT recovery.
• Some expenses qualify for VAT recovery only in certain circumstances.
• Business entertaining has different VAT rules to Corporation Tax.

If your business is VAT registered, it’s worth checking both sets of rules.

Keeping Good Records

Good bookkeeping makes claiming expenses much easier.

We recommend keeping:

• Receipts
• Invoices
• Bank statements
• Mileage records
• Hotel confirmations
• Travel bookings

Digital copies are usually perfectly acceptable, provided they’re clear and complete.

What Happens If HMRC Ask Questions?

HMRC may ask you to explain:

• why you bought something
• how it relates to your business
• whether there was any personal use
• where the supporting evidence is

Keeping clear records makes these enquiries much easier to deal with.

Our Advice

If you’re unsure whether something is a business expense, don’t guess.

A quick conversation before making a purchase can often save:

• tax problems
• bookkeeping corrections
• HMRC enquiries
• unnecessary costs

Still Not Sure?

Every business is different.

The correct answer often depends on:

• your business structure
• whether you’re VAT registered
• who owns the asset
• how it’s used
• whether there’s any private benefit

That’s why it’s difficult to answer every question with a simple “yes” or “no”.

If you’re one of our clients, just get in touch before making the purchase and we’ll be happy to advise.

If you’re not yet a client and would like straightforward advice from qualified accountants, we’d love to help.

Contact CloudBook today to discuss your business and make sure you’re claiming everything you’re entitled to.

Quick Checklist

Before buying anything through your business, ask yourself these five questions:

✅ Is it wholly and exclusively for my business?

✅ Would I have bought it if I didn’t run the business?

✅ Can I prove the purchase if HMRC ask?

✅ Is there a specific HMRC rule that affects this expense?

✅ If I’m VAT registered, can I recover the VAT?

If you can answer yes to those questions, there’s a good chance the expense will qualify.

Disclaimer

This guide provides general information based on UK tax rules at the time of writing. Tax legislation changes regularly, and the correct treatment depends on your individual circumstances. Please contact us before relying on this guide for significant purchases or tax decisions.

Last reviewed: July 2026