Tag: Expenses
Can I claim working-from-home costs as a sole trader?
Yes. If you work from home for 25 hours or more a month you can claim a flat rate with no receipts: £10 a month for 25 to 50 hours, £18 for 51 to 100, and £26 for 101 or more. Phone and internet are claimed separately, on the business share of the actual bills. If your real costs are higher, you can claim a share of your actual household costs instead, but you will need the workings. Cited to GOV.UK, checked 20 October 2026.
Is business loan interest tax deductible?
Yes, if the loan is for the business. A sole trader claims interest on bank and business loans as an allowable expense, and a company deducts interest before working out its Corporation Tax. What you can never claim is the repayment of the loan itself: only the interest. A £10,000 loan at 8% costs £800 of interest in a year, and that £800 is what reduces your taxable profit. Cited to GOV.UK, checked 20 October 2026.
What expenses can a sole trader claim?
Short answer: you can deduct the costs of running your business from your income, as long as they are allowable expenses. You pay Income Tax only on what is left, your taxable profit. You can only claim for business costs, and you cannot claim expenses if you use the £1,000 trading allowance. GOV.UK gives an example. If your turnover is £40,000 and you claim £10,000 of allowable expenses, you pay Income Tax on the remaining £30,000. Cited to GOV.UK, checked 20 October 2026.