Free Expense Tracker

Start tracking your expenses

Use the expense tracker above to add each business cost as it happens. Enter the date, a short description, the amount and a category, then let the tool keep the running total for you. Because everything is stored in your browser, you can close the tab and come back later without losing your list.

How the expense tracker works

The maths behind an expense tracker is deliberately simple, and that is the point. You are not trying to calculate tax here, you are building the clean, categorised record that every other tax decision depends on. The formula is just:

Total deductible expenses = sum of every allowable business cost in the period

So if you log £42 for stationery, £180 for software and £95 for an accountant's fee, your running total is £42 + £180 + £95 = £317. When you come to file, that £317 is subtracted from your turnover before tax is worked out.

The reason this matters is that allowable expenses reduce your taxable profit pound for pound. If you are a basic-rate sole trader, every £100 of genuine expense you record saves you 20% in income tax plus 6% Class 4 National Insurance on that slice of profit, so roughly £26 back in your pocket. Miss the receipt and you simply pay tax on money you have already spent running the business. HMRC's guidance on expenses if you are self-employed sets out which categories count.

An expense tracker does three jobs: it captures the cost while you still remember what it was for, it sorts each item into a category that maps to the boxes on your tax return, and it gives you a total you can hand to your accountant or type straight into HMRC's form. Do those three things consistently and the painful January scramble disappears.

What counts as an allowable business expense

HMRC's test is that a cost must be incurred "wholly and exclusively" for the business. The common categories a self-employed expense tracker should cover are:

• Office costs: stationery, postage, printer ink, phone and broadband used for work.
• Travel: train and bus fares, parking, and business mileage in your own vehicle.
• Stock and materials: goods you buy to sell or raw materials you turn into a product.
• Professional fees: accountants, solicitors, trade subscriptions and insurance.
• Software and tools: subscriptions, equipment and the apps you run the business on.
• Premises: rent, utilities, or a proportion of your home if you work there.

Some costs are only partly deductible. If you use your mobile for both work and personal calls, you can only claim the business share. The same applies to a car used for the school run and client visits. Keep a sensible, defensible split and note how you worked it out.

Worked example: a freelance designer's quarter

Imagine Priya, a freelance graphic designer billing around £40,000 a year. Over three months she logs the following in her expense tracker:

• Design software subscription: £180
• New laptop (business use): £900
• Train fares to client meetings: £140
• Home office share of broadband and energy: £120
• Professional indemnity insurance: £160

Her running total for the quarter is £180 + £900 + £140 + £120 + £160 = £1,500. Over a full year at a similar pace that is around £6,000 of allowable expenses. Because Priya is a higher-rate taxpayer on part of her profit, much of that £6,000 is shielded from 40% income tax, so recording it properly could save her well over £2,000 across the year compared with claiming nothing.

Now compare a second trader, Marcus, a self-employed plumber on £30,000 of profit. He records £4,000 of tools, van fuel and materials. At the basic rate that £4,000 cuts his income tax by 20% (£800) and his Class 4 National Insurance by 6% (£240) on that slice, a combined saving of roughly £1,040. The expenses were real money he spent either way; tracking them is what turns the spend into tax relief.

Linking your tracker to the rest of your tax

An expense total is only useful once it feeds into your wider tax picture. Once you have your yearly figure, drop it into our self-employed tax calculator to see the effect on your bill, and if you drive for work, log those journeys in the mileage tracker so you do not lose the 45p-a-mile allowance. If you keep paper receipts, our receipt scanner turns them into digital records you can attach to each entry.

Working from home? The use of home as office calculator helps you set a fair proportion of household bills to claim, which is one of the most commonly under-claimed expenses for sole traders.

How to reduce your tax bill with better record-keeping

The single biggest win is logging costs as they happen rather than reconstructing them from memory in January. A few practical habits:

• Add every cost the same day you pay it, while you still remember what it was for.
• Keep the receipt. HMRC can ask you to evidence any claim, and you must keep records for at least five years after the 31 January filing deadline.
• Use one bank account or card for the business so personal and business spending never blur.
• Review your categories each quarter so nothing slips through, especially if you are within Making Tax Digital for Income Tax. HMRC's Making Tax Digital guidance explains the new quarterly update rules.
• Export to CSV at year end and store a copy with your tax records.

If you are unsure whether a cost qualifies, the free, impartial guidance at MoneyHelper is a good starting point before you speak to an accountant.

Common mistakes to avoid

Plenty of traders lose money by tracking expenses badly. Watch for these:

• Claiming 100% of a mixed-use cost. Your phone, car and home are rarely used only for work. Apportion honestly.
• Forgetting cash purchases. Small cash buys for parking, postage or supplies add up to hundreds of pounds a year and are easy to miss.
• Mixing capital and revenue. Big equipment may need capital allowances rather than a simple expense deduction; check our capital allowances calculator for larger purchases.
• No backup. Browser-only data can be wiped if you clear your cache. Export to CSV regularly.
• Double-counting. If you reclaim a cost from a client and also claim it as an expense, you are getting relief twice. Track reimbursed costs separately.

Remember that the rules and rates that turn your expense total into a tax saving differ across the UK: income tax bands are set separately in Scotland, so a Scottish taxpayer's saving on the same expense can vary from the rest of the UK. The expense tracker itself works the same wherever you are; it is the tax calculation downstream that changes.

These figures are estimates for guidance only and not personal tax or financial advice. Check your own circumstances with HMRC or a qualified adviser.

Related tools to keep your books tidy

Pair this expense tracker with our invoice generator to record what you bill, and use the bank statement converter to pull transactions out of your statements and match them against the costs you have logged.

Who should use this tool

A running record of business expenses, which is the foundation of both an accurate tax return and a defensible one. Most sole traders under-claim simply because costs were never recorded, and reconstructing a year from memory in January guarantees things are missed.

Recording as you go also protects you. HMRC can ask for evidence, and a contemporaneous record with dates, amounts and categories is far stronger than a spreadsheet assembled after the fact. Under Making Tax Digital, digital record keeping becomes mandatory for many sole traders and landlords anyway.

What this tool assumes

• Expenses are recorded with date, amount, description and category.
• Amounts are entered inclusive of VAT, with the VAT element separable where you are registered.
• Categories map to the headings used on a Self Assessment return.
• Costs recorded are wholly and exclusively for business, or apportioned to the business share.

Limitations — what it does not cover

• Whether a cost is actually allowable, which is a judgement — see the expenses checker.
• Capital items, which go through capital allowances rather than expenses.
• Receipt storage. HMRC expects supporting evidence retained for five years after the filing deadline.
• MTD-compatible submission, which requires recognised software with digital links.
• Cash basis versus traditional accounting, which changes when a cost is recognised.
• VAT recovery, which has its own evidence requirements.