The deductions you are not claiming (and what they cost you)

Quick answer

Self-employed workers can deduct every cost that is wholly and exclusively for the business: typically worth £1,000 to £3,000 of deductions a year, which is £260 to £780 less tax for a basic-rate sole trader (26% saved per £1 including Class 4 NI). The checker above shows what your trade usually misses.

Why sole traders overpay

Every £1 of legitimate business expense you fail to claim adds £1 to your taxable profit, taxed at roughly 26% for a basic-rate sole trader (20% income tax plus 6% Class 4 National Insurance) and 42% at higher rate. Most under-claiming is not caution, it is simply not knowing an expense counts or not keeping the record at the time.

The most-missed claims

Mileage at 45p a mile (25p after 10,000) for trips to jobs, suppliers and clients. Working from home, either HMRC\'s flat rate of up to £26 a month or a share of actual bills. The business share of phone and internet. Washing protective or branded workwear. Tools and small equipment replaced through the year. Insurance, software, subscriptions, bank fees and advertising. Individually small, together they are commonly £1,000 to £3,000 of deductions a year.

The rules in one paragraph

An expense must be wholly and exclusively for the business. Mixed-use costs (phone, home, car) are claimed in proportion. Everyday clothing never counts, even bought for work. Training counts when it updates existing skills, not when it teaches a brand-new trade. And you need records: a photo of a receipt in a folder, or logged in an expense tracker, is enough.

Already filed? You can still fix it

A Self Assessment return can be amended up to 12 months after its filing deadline, and overpayment relief can reach back four years for clear mistakes. Going forward, log expenses as they happen and the January panic disappears.

HMRC's flat rates you can use without receipts

Working from home (simplified expenses)

Vehicle mileage

The full allowable list is on GOV.UK self-employed expenses and simplified expenses. Log as you go with the expense tracker and mileage tracker, then claim it all in the tax return wizard.

Who should use this calculator

Most sole traders under-claim, not because they are cautious but because they do not know a category exists. This walks through the expense types commonly missed — use of home, phone and internet apportionment, professional subscriptions, training, bank charges, and pre-trading costs incurred in the seven years before you started.

Every pound of legitimate expense reduces profit, and therefore both Income Tax and Class 4 National Insurance. At the basic rate that is roughly 26p back per pound; in the higher-rate band closer to 42p. The test is simply whether the cost is wholly and exclusively for the business.

What this calculator assumes

• Expenses must be wholly and exclusively for business purposes; mixed-use costs are apportioned to the business share.
• Relief is worth your marginal rate of Income Tax plus Class 4 NI, not the full amount spent.
• Simplified flat-rate expenses are available for home working and vehicles as an alternative to actual costs.
• The trade you select adjusts which categories are most likely to apply.

Limitations — what it does not cover

• Capital items. Equipment is claimed through capital allowances, not as a running expense.
• Entertaining clients, which is never allowable however business-related.
• Ordinary commuting to a regular place of work.
• Clothing, unless it is protective or a genuine uniform — ordinary business clothes do not qualify.
• Record keeping. HMRC can require evidence, and a claim without records is hard to defend.
• The cash basis versus traditional accounting choice, which changes when income and costs are recognised.