What Expenses Can I Claim as Self-Employed in Scotland?

What Are Allowable Expenses?

Allowable expenses are business costs you can deduct from your income before calculating your taxable profit. The lower your taxable profit, the less tax you pay. HMRC allows you to claim expenses that are incurred "wholly and exclusively" for business purposes. Claiming every legitimate expense you are entitled to is one of the most effective legal ways to reduce your tax bill.

1. Mileage and Vehicle Costs

If you use your own vehicle for business purposes, you can claim either:

2. Home Office Costs

If you work from home, you can claim a proportion of your home running costs. HMRC offers two options:

• Flat rate: £6 per week (£312 per year) — simple, no receipts needed
• Actual costs: Calculate the business proportion of rent/mortgage interest, utilities, broadband and council tax based on the number of rooms used for business and hours worked

3. Equipment and Tools

Business equipment purchased exclusively for work — laptops, cameras, tools, machinery, phones — can be claimed as capital allowances. Under the Annual Investment Allowance (AIA), you can deduct the full cost in the year of purchase up to £1 million. Second-hand equipment also qualifies.

4. Phone and Broadband

If you use your personal phone and broadband for business, you can claim the business proportion. For example, if 60% of your phone use is for business, claim 60% of the bill. A dedicated business phone or broadband contract can be claimed in full.

5. Professional Subscriptions and Memberships

Subscriptions to professional bodies, trade associations and relevant industry publications are allowable. Examples include GMC fees for doctors, GDC fees for dentists, RICS fees for surveyors, trade union fees and professional indemnity insurance.

6. Training and CPD

Training costs are allowable if they are directly related to your current business and update or improve your existing skills. Training for a completely new trade or skill is not allowable. Relevant CPD, courses, books and seminars all qualify.

7. Advertising and Marketing

Business advertising costs are fully deductible — website hosting, social media ads, Google Ads, flyers, business cards, directories and sponsorship related to your business all qualify.

8. Accountancy and Professional Fees

Your accountant's fees are a fully allowable business expense. Legal fees related to business contracts and disputes are also claimable, as are banking charges on your business account.

Expenses You CANNOT Claim

• Personal clothing (unless it is a uniform or protective equipment)
• Food and drink (unless staying away from home for work)
• Client entertainment — HMRC does not allow this deduction
• Fines or penalties
• Capital repayments on business loans (interest is allowable, capital is not)