Guide

Freelancer tax deductions: what you can claim

Tax is on profits, not turnover — so every legitimate expense you claim reduces your tax bill. The rule is simple: if it is wholly and exclusively for your business, you can deduct it.

Updated 8 October 2026 About 7 minutes to read

Key takeaways

  • Tax is on profits, not turnover — every legitimate expense cuts your bill.
  • The rule: wholly and exclusively for business — if it is not, you cannot claim it.
  • Home office, equipment, travel, software and training are the most common claims.
  • Capital allowances replace depreciation for equipment over £50.
  • Keep receipts for everything — HMRC can ask for proof up to 6 years back.

The golden rule: wholly and exclusively

HMRC’s test for a deductible business expense is that it must be wholly and exclusively for the purposes of your trade. If an expense has a private element — like your phone bill — you can only claim the business portion. If it is 100% business — like a software subscription you only use for client work — you claim the full amount.

The simplest way to think about it: if you did not have this business, would you still have this expense? If yes, it probably has a private element and you need to split it. If no, it is likely fully deductible.

Home office

If you work from home, you can claim a portion of your household costs as a business expense. There are two ways:

  • Simplified rate — a fixed HMRC rate based on hours worked at home per month: £10/month for 25-50 hours, up to £26/month for 100+ hours. No receipts needed.
  • Actual costs — a proportion of rent/mortgage interest, utilities, council tax and internet, based on the floor area of your workspace relative to your home. More work but often a higher deduction.

You can only claim actual costs if your home is your main place of business or you spend a significant amount of time working there. A dedicated room used only for business makes the claim cleaner.

Equipment and capital allowances

Equipment you buy for your business — a laptop, camera, tools, furniture — is deductible, but through capital allowances rather than as a direct expense. The Annual Investment Allowance (AIA) lets you deduct the full cost of most equipment in the year you buy it, up to £1 million per year. For most freelancers this means the full cost of a new laptop is deducted in the year of purchase.

  • Laptops and computers — full cost under AIA.
  • Software and subscriptions — full cost as an expense (not capital allowance).
  • Tools and equipment — full cost under AIA.
  • Furniture — desk, chair, shelving for the office — full cost under AIA.

Travel

Business travel is deductible: trains, buses, flights, hotel stays and parking when travelling for work. The key is that the journey must be for business — commuting to a regular workplace is not deductible, but travelling to a client site is.

  • Mileage — if you drive, claim 45p per mile for the first 10,000 miles, 25p above. This covers fuel, insurance, depreciation and maintenance.
  • Public transport — full cost of tickets for business travel.
  • Hotels and meals — reasonable costs when travelling for business overnight.

Software and subscriptions

Any software you use for your business is fully deductible: accounting software, design tools, cloud storage, project management, web hosting. Even if you also use it personally, if the primary use is business, you can claim it. Subscriptions to professional bodies and trade magazines are also deductible.

Training and professional development

Training that updates or maintains your existing skills is deductible. This includes courses, workshops, conferences and books related to your trade. Training to learn entirely new skills — like a career change — is not deductible, because it is not for your existing trade.

Keeping records

You must keep records of all expenses for six years. Receipts, invoices, bank statements and mileage logs all count. Digital records are fine — a photo of a receipt on your phone is acceptable. The key is being able to prove the expense was real and was for business if HMRC asks.

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Frequently asked questions

What can freelancers claim as tax deductions?

Anything wholly and exclusively for the business: home office costs, equipment (via capital allowances), business travel, software and subscriptions, professional training, and other business expenses. Each reduces your taxable profit.

Can I claim my home office?

Yes. Use the simplified rate (£10-£26/month based on hours) or claim actual costs (a proportion of rent, utilities, council tax based on workspace floor area). A dedicated room used only for business makes the claim cleaner.

How much can I claim per mile?

45p per mile for the first 10,000 business miles per year, and 25p per mile above that. This covers fuel, insurance, depreciation and maintenance — you do not claim these separately.

Can I claim my laptop?

Yes, through the Annual Investment Allowance (AIA). You can deduct the full cost of a laptop (and most equipment) in the year you buy it, up to £1 million per year.

How long must I keep expense records?

Six years. HMRC can ask to see receipts and records at any point in that window. Digital records are fine — a photo of a receipt on your phone counts.

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General guidance only — not legal, tax or accounting advice. Rules and rates can change; check HMRC's current guidance for the latest. Last reviewed 8 October 2026.