Guide · 10 min read · UK · 2026/27 tax year

    Freelancer tax deductions (UK)

    Every expense self-employed freelancers can claim against HMRC — with the 2026/27 thresholds, allowable percentages, and the "wholly and exclusively" rule in plain English.

    The HMRC rule, plain

    An expense is allowable if it was incurred wholly and exclusively for the purposes of your trade. Mixed-use? You claim the business portion (e.g. 70% of your phone bill if 70% of calls are work). Personal? You can't claim it, even if it makes your work easier.

    Office & home working

    Use of home as office (simplified £6/week or actual costs %)
    Office rent, utilities, business rates
    Coworking memberships
    Office furniture & equipment

    Technology

    Laptop, monitor, phone (business use %)
    Software subscriptions (SaaS, design tools, accounting apps)
    Web hosting, domains, SSL
    Cloud storage

    Travel & transport

    Business mileage (45p/mile first 10k, 25p after)
    Train, bus, taxi for client work
    Parking on business journeys
    Overnight stays for work (hotel + meals within reason)

    Professional services

    Accountant & bookkeeper fees
    Legal fees (business-related)
    Professional indemnity insurance
    Trade body & professional subscriptions

    Marketing

    Website design & hosting
    Online ads (Google, Meta, LinkedIn)
    Business cards, print collateral
    Trade shows & networking events

    Training & development

    Courses directly related to your trade
    Books and reference materials
    Conferences & industry events

    Banking & finance

    Business bank account fees
    Payment processor fees (Stripe, PayPal, GoCardless)
    Interest on business loans
    Bad debts written off

    Track every deduction automatically

    SnapBooks pulls in your bank feed, scans receipts, tracks mileage at HMRC rates, and exports a Self Assessment-ready summary. £12/mo flat (or your local currency).

    Start 7-day free trial

    Key UK thresholds (2026/27)

    • Personal allowance: £12,570 — tax-free
    • Basic rate (20%): £12,571 – £50,270
    • Higher rate (40%): £50,271 – £125,140
    • Additional rate (45%): above £125,140
    • Trading allowance: £1,000 (alternative to claiming expenses)
    • VAT registration: £90,000 turnover
    • Class 2 NIC: abolished from 2024/25 (you're paid up automatically if profits over £6,725)
    • Class 4 NIC: 6% on profits £12,570–£50,270, then 2%

    What you can't claim

    • Everyday clothing (even if you wear it for work) — only branded uniforms or genuine PPE
    • Client entertainment (drinks, meals out with clients)
    • Fines and parking tickets
    • Your own salary or drawings
    • Personal mobile phone contract (only the business-use %)
    • Commuting to a regular workplace

    Related

    Frequently asked questions

    What can I claim as a self-employed freelancer in the UK?+

    Anything 'wholly and exclusively' for your business — home office costs, equipment, software, travel, professional fees, marketing, training. HMRC's test is whether the expense was incurred to earn business income.

    Can I claim use of home as office?+

    Yes. Two methods: (1) simplified £6/week (no records needed) if you work 25+ hours/month from home, or (2) actual costs — calculate the business % of council tax, utilities, rent/mortgage interest, and broadband. Most freelancers do better with method 2 once they track it.

    How do I claim mileage for self-employment?+

    HMRC's approved rates: 45p per mile for the first 10,000 business miles in the tax year, 25p per mile after. Keep a log — date, destination, purpose, miles. SnapBooks tracks this automatically when you mark a trip as business.

    What's the trading allowance?+

    If your self-employed income is under £1,000 a year, you don't have to register or report it. Above £1,000 you can either deduct actual expenses or take the £1,000 trading allowance — not both. For most freelancers, actual expenses beat the allowance once you cross ~£3k revenue.

    When is the Self Assessment deadline?+

    Paper return: 31 October. Online return: 31 January following the end of the tax year (6 April–5 April). Payment due: 31 January (balance) + 31 July (payment on account). Miss it and you're looking at a £100 instant penalty plus interest.

    Do I need to register for VAT?+

    Only when your taxable turnover exceeds £90,000 (2026 threshold) in a 12-month rolling period. You can register voluntarily below that — sometimes worth it if your clients are VAT-registered businesses.

    General guidance, not personalised tax advice. Rules and thresholds change — verify against HMRC.gov.uk and speak to a UK accountant for your situation.