What Expenses Can a Self-Employed UK Tradesperson Claim?

The single biggest avoidable tax cost for UK self-employed tradespeople is unclaimed allowable expenses. Every pound of legitimate expense you claim reduces your taxable profit by a pound — at 20% basic rate that's 20p saved per pound; at higher rates closer to 40p. Most independent tradies under-claim by 20-30% because they don't track receipts carefully or aren't sure what's allowable. This guide walks through every major category for 2026.

The wholly-and-exclusively rule

HMRC's test for whether something is allowable is the 'wholly and exclusively' rule. An expense is allowable if it was incurred wholly and exclusively for the purpose of the business. Personal costs aren't. Mixed-use costs (e.g. a phone used for business and personal calls) are claimable for the business proportion only.

Vehicle expenses — the biggest single category

For most UK tradespeople, vehicle costs are the largest expense category. You have two options for claiming them:

1. Actual cost method — claim the business proportion of every vehicle cost: fuel, insurance, MOT, servicing, repairs, finance interest, tax. Requires receipts and a mileage log.
2. Simplified mileage rate — claim 45p per business mile for the first 10,000 miles each tax year, then 25p per mile after that. Excludes parking and tolls (which you claim separately). No need to track individual costs.

The simplified method is usually better for tradies who drive 8,000-15,000 business miles per year in a modest van. The actual cost method is usually better for expensive vans (financed Transits, electric vans) where actual costs exceed 45p/mile. You can't switch methods mid-year on the same vehicle.

Tools and equipment

Small tools (under £100 per item) are claimed as straight revenue expenses in the year you bought them. Larger tools and capital equipment (power tools, scaffold towers, testing equipment over £100) are claimed under Annual Investment Allowance (AIA) — currently £1,000,000 per year, which is well beyond what any sole-trader tradesperson will ever spend on capital equipment. AIA effectively means 100% first-year expensing on equipment that would otherwise be subject to slower writing-down allowances.

• Power tools and hand tools — fully deductible
• PPE (boots, gloves, hi-vis, hard hats, ear/eye protection) — fully deductible
• Specialist testing equipment (EICR test kits, gas analysers, multimeters) — AIA on items >£100
• Workwear with a logo or that's protective in nature — deductible; everyday clothing isn't
• Tool repairs and replacements — deductible
• Tool insurance — deductible

Materials and consumables

Materials are deductible in the year you bought them OR the year you used them (small businesses can use either; most use the year-of-purchase basis for simplicity). Track them as cost-of-sales rather than expenses — different tax treatment from general overheads, but both reduce taxable profit equally.

Important: materials bought for a specific customer job are deductible regardless of whether the customer has paid yet. The cost goes into your books when you purchase, even if you invoice later.

Insurance and trade memberships

• Public liability insurance — fully deductible
• Employers' liability insurance (if you have employees/subcontractors) — fully deductible
• Tool insurance — deductible
• Professional indemnity — deductible
• Trade body memberships (Gas Safe Register, NICEIC, NAPIT, ELECSA, FMB, ECA, SELECT) — deductible
• Income protection insurance for self-employed — partially deductible (rules complex; ask your accountant)
• Private health insurance — NOT deductible if for personal coverage

Phone, broadband, and software

Mobile phone and broadband costs are claimable for the business proportion of use. Most tradespeople estimate 70-90% business use for the mobile, 30-50% for home broadband. If you have a dedicated business phone, claim 100%. Apps and software subscriptions used for the business (Wedge, FreeAgent, Tradify, Google Workspace) are 100% deductible.

Use of home as office

HMRC offers two methods for claiming a proportion of household costs as business expense:

1. Simplified flat rate (most tradespeople use this) — £10/month for 25-50 hours of business use from home per month, £18/month for 51-100 hours, £26/month for 101+ hours.
2. Actual cost method — claim a proportion of mortgage interest (not capital), council tax, utilities, broadband, repairs and maintenance, based on rooms used and time used. More paperwork but can claim significantly more if you do a lot of admin/quoting/calls from home.

Marketing and customer acquisition

• Website hosting and domain — deductible
• Google Ads and Facebook Ads — deductible
• Listing fees (Checkatrade, MyBuilder, Rated People, Trustpilot) — deductible
• Van signage and business cards — deductible (signage may be capital if substantial)
• Branded workwear — deductible

Training and CPD

Training that maintains or refreshes existing skills is fully deductible (Gas Safe re-assessment, NICEIC continuing competence, Part P reassessment, first aid renewals, manual handling refresher, asbestos awareness updates). Training that gives you a NEW qualification you didn't have before is typically capital in nature and not immediately deductible — though this rule has eased in recent years and most CPD-style training is now accepted as revenue expense.

Subcontractor payments (CIS)

If you pay other tradespeople as subcontractors (whether CIS-registered or not), their gross fees are deductible expenses. If they're CIS-registered, you deduct 20% from labour (never materials) and pay it directly to HMRC monthly. The labour cost minus the deduction is still your expense; the 20% you deducted is theirs (you're just acting as withholding agent). For non-CIS labour-only work, you pay them gross and they declare it themselves.

What you can't claim

• Food bought for personal lunches (unless you're working away from your normal area overnight)
• Normal commuting clothes (only protective workwear or branded uniforms qualify)
• Speeding tickets, parking fines, congestion charge penalty notices — fines are never deductible
• Capital costs of buying or improving your home (some council tax / utilities apportioned, yes; but not mortgage capital repayments)
• Personal entertainment, gifts to clients above £50, alcohol
• Income protection insurance that covers you personally (not the business)
• Pension contributions — these go through Self Assessment as personal tax relief, not business expense

Record-keeping rules under MTD ITSA

From April 2026, sole-trader tradespeople earning £30,000+ in turnover must keep digital records of every business income and expense, and file quarterly under Making Tax Digital for Income Tax. The digital record can be a CSV, a structured accounting tool, or any system that timestamps each entry. Receipts must be retained (paper or digital) for 5 years and 10 months after the relevant tax year ends.

Wedge stores every invoice and expense as a digital record from the moment it's entered, and exports CSVs ready for MTD-compatible filing software (FreeAgent, QuickBooks, Xero, GoSimpleTax). Snap receipts on WhatsApp and the photo, supplier name, date, total, and VAT are all extracted and stored against the expense automatically.