What Business Expenses Can I Claim?

Introduction

Understanding which business expenses you can claim is essential for reducing your tax bill and staying compliant with HMRC. If you're self-employed, you can deduct many costs that are incurred "wholly and exclusively" for your business, but the rules on what qualifies can be complex—particularly when it comes to training and development.

What Makes an Expense Allowable?

For an expense to be allowable, it must be incurred wholly and exclusively for the purposes of your business. This means the cost must have a clear business purpose and not be for personal use. Allowable expenses reduce your taxable profit, which in turn reduces the amount of tax you pay.

Training and Development Costs

Training expenses follow specific rules that are worth understanding in detail, as HMRC distinguishes between updating existing skills and acquiring completely new ones.

When Training Costs Are Allowable

You can claim for training that:

Updates or refreshes your existing skills. For example, if you're a wedding photographer who attends an online refresher course on photo editing software to improve skills you already use in your business, this cost is allowable.

Helps you run your business more effectively. A plumber who takes a beginners' bookkeeping course can claim the cost, even though it doesn't relate to plumbing skills. The training helps them maintain accurate accounting records and run their business better.

Keeps you up to date with modern business practices. If you're a pottery seller moving from physical sales to online selling, courses on e-commerce and basic website development are allowable. These skills help you adapt to modern selling methods, even though they're not directly related to making pottery.

Adds new expertise in areas related to your existing business. A website designer completing a short course on artificial intelligence (AI) technology to add new tools and functionality to their designs can claim the cost.

Helps you keep pace with changing technology in your industry. When a gas boiler fitter trains to install heat pump systems—an emerging alternative to gas boilers—the cost is allowable because they're future-proofing their existing business.

Provides knowledge your clients expect you to have. A personal trainer who attends a nutrition course to better understand how to develop training plans for existing clients can claim this expense, as clients expect trainers to have basic nutritional knowledge.

Improves your existing products or services. An author who runs an online store selling children's storybooks they write can claim the cost of a beginners' drawing course if they plan to illustrate their own books instead of paying an illustrator.

When Training Costs Are Not Allowable

You cannot claim for training that:

Provides skills to start a completely new business. An unemployed person completing a course to become an approved driving instructor cannot claim the cost, as they're acquiring skills to start a business that doesn't yet exist.

Is unrelated to your business operations. A shop owner running a sportswear shop cannot claim the cost of a sports science degree, even if they believe it will help them understand customers better. The knowledge doesn't specifically help them sell sportswear.

Relates to a different business you're planning to start. A freelance makeup artist who wants to open a tattoo studio cannot claim the cost of tattooing courses. These costs relate to a new business, not their existing makeup artistry work.

Helps you move into a completely different industry. A taxi driver who completes a painting and decorating course with plans to change careers cannot claim the cost against their taxi driving business.

The Key Distinction

The critical factor is whether the training relates to your existing business or a new venture. HMRC allows expenses for skills that maintain, update, or enhance what you already do—including adapting to new technology or business methods within your field. Training that gives you an entirely new profession or helps you start a different type of business is not allowable.

Record-Keeping Requirements

To claim any business expense, including training costs, you must keep accurate records. This means retaining:

• Receipts and invoices for all training courses
• Evidence of what the training covered
• Documentation showing how it relates to your business

Keep these records for at least five years after the 31 January submission deadline for the relevant tax year. For the 2025/26 tax year, this means keeping records until at least 31 January 2032.

How to Claim

If you're self-employed, you claim allowable expenses through your Self Assessment tax return. Include training costs that meet the allowability criteria in the appropriate expenses section when calculating your taxable profit for the year.

Sources

• Check if the cost of training could be an allowable business expense

This article provides general guidance based on current HMRC rules. For advice specific to your situation, speak to your accountant.