The general rule
An expense is allowable if it is incurred wholly and exclusively for the purposes of the trade. Costs with a personal element generally need to be split, with only the business portion claimed.
Commonly allowable costs
Staff costs: salaries, employer National Insurance and employer pension contributions — including your own salary as a director.
Premises and office: rent, utilities for business premises, and a reasonable amount for working from home.
Business travel and accommodation — though ordinary commuting between home and a regular workplace is not allowable.
Equipment and software: computers, tools and machinery are typically relieved through capital allowances, and most small purchases qualify for a full deduction in the year of purchase; software subscriptions are usually allowable as a running cost.
Professional services: accountancy, legal fees relating to the trade, insurance, bank charges.
Marketing and websites, phone and internet (business use), and training that maintains or updates skills used in the business.
Commonly not allowable
Client entertaining — meals, hospitality and event tickets for customers or suppliers are specifically disallowed, even though they are genuine business costs.
Fines and penalties, such as parking fines — even if incurred while working.
Depreciation — accounting depreciation is added back in the tax computation, with capital allowances claimed instead. OneFiler handles this adjustment automatically.
Personal costs, including everyday clothing, even if worn for work.
Keep the evidence
HMRC can ask for records supporting any expense, so keep invoices and receipts — company records generally need to be retained for at least six years.
If your bookkeeping lives in QuickBooks or Xero, your categorised expenses flow straight into your return when you import your figures.