What are the allowable expenses for sole traders and landlords?

Understanding which expenses can be claimed is an essential part of mitigating tax liabilities efficiently. While tax rates may change over time, the underlying rules for allowable expenses remain broadly consistent. This makes the topic one that business owners and landlords can rely on.

For sole traders, allowable expenses must be wholly and exclusively for the purpose of the business. This includes items such as materials, stock, tools, insurance, advertising, professional fees, and software. Running costs for vehicles used for business travel can be claimed using either actual costs or the simplified mileage rates. Home working costs can also be claimed if part of the home is used for work on a regular basis.

Landlords can claim costs that relate to the day-to-day running of their property letting. These include repairs and maintenance, letting agent fees, insurance, service charges, and replacement of domestic items. It is important to distinguish repairs from improvements. A repair restores the property to its original condition, while an improvement enhances or upgrades. Improvements are usually treated as capital expenditure, not an immediate deduction reducing current year income tax.

Both landlords and sole traders should keep clear records of every transaction. Missing receipts or unclear bank entries can lead to disallowed claims, which may increase the tax bill unnecessarily. Clear records also make it easier to identify legitimate costs that may otherwise be overlooked.

It is worth reviewing expenses each year as habits change and new allowable costs may become relevant. Many business owners are surprised by how much they can claim once their records are complete and well organised.

Good allowable expense management is not about pushing the limits. It is about ensuring that genuine business and rental costs are fully captured and accurately claimed.

How Moore South can help

Understanding what can and cannot be claimed is key to managing tax efficiently, but the rules can be easy to misapply without the right guidance. This is particularly true where expenses are mixed between personal and business use, or where property costs fall close to the line between repairs and improvements.

Moore South supports sole traders and landlords with tax compliance, expense reviews and record-keeping processes, helping ensure that all legitimate costs are captured while avoiding unnecessary risk.
Contact Moore South to review your allowable expenses and ensure you’re claiming correctly.