Top Tax Deductions for UK Freelancers

Let’s be honest — when most people think of freelancing, they imagine freedom, flexibility, and the joy of working in pyjamas. But lurking beneath the surface of every creative gig and client invoice is something far less glamorous: tax season.

Whether you’re a graphic designer in Glasgow or a copywriter in Croydon, there’s one thing that binds us all — the responsibility to keep HMRC happy. And if you’re not making the most of allowable expenses, you could be paying more tax than necessary.

But here’s the good news: knowing what you can legally deduct from your freelance income can significantly reduce your tax bill. This guide breaks down the top tax deductions UK freelancers can claim, based on real-world situations, clear explanations, and practical tips.

You’ve worked hard to earn that income — let’s make sure you keep as much of it as possible.

What Are Allowable Expenses?

A Simple Definition

Allowable expenses are the costs you incur to run your freelance business. HMRC lets you deduct these from your income when calculating your taxable profit. That means a lower tax bill and more money in your pocket.

The key phrase HMRC uses is: the expense must be “wholly and exclusively” for business purposes.

Why It Matters

If you earn £40,000 in a year and spend £10,000 on allowable expenses, you’re only taxed on £30,000. That can make a massive difference, especially when you’re juggling unpredictable income and rising costs.

The Top Tax Deductions Every UK Freelancer Should Know

Let’s dive into the most common — and often overlooked — expenses you can claim.

1. Home Office Costs

Working from home is now the norm for many freelancers, but are you claiming the correct deductions?

You can claim for:

• A percentage of rent or mortgage interest
• Council tax
• Heating and electricity
• Broadband and phone line costs

There are two methods:

A. Simplified Expenses: Claim a flat rate based on hours worked from home:

B. Actual Costs: Calculate the proportion of your bills based on how many rooms you use for work.

Real-life scenario: Sarah, a freelance editor, works from her spare room five days a week. She claims 25% of her energy bills and broadband costs under the actual cost method. This saves her over £500 a year.

2. Office Supplies and Equipment

Anything you use to run your business qualifies, including:

• Notebooks, pens, and printer ink
• Desks and ergonomic chairs
• Laptops and monitors
• Software and app subscriptions (e.g., Adobe Creative Cloud, Microsoft 365)

Tip: If the equipment will last more than 2 years, it’s often considered a capital allowance — but still deductible.

3. Professional Services and Subcontractors

You can claim:

• Accountants or tax advisors
• Virtual assistants or freelance subcontractors
• Legal advice related to business matters

Even platforms like Fiverr or Upwork expenses may be deductible if the services were for your business.

Example: Tom hires a freelance video editor to help with client work. The £600 he pays is 100% tax-deductible.

4. Marketing and Advertising

Promoting your services? Claim back the cost.

• Social media ads (Facebook, Instagram, LinkedIn)
• Google Ads
• Business cards and flyers
• Website hosting and domain registration
• SEO tools or email marketing platforms

Just ensure the promotions are for business purposes, not personal ventures.

5. Travel and Mileage

You can claim:

• Public transport fares (train, bus, tube)
• Mileage if you use your own car for work

Mileage rates (as of 2025):

• 45p per mile for the first 10,000 miles
• 25p per mile thereafter

Also allowable:

• Parking fees (but not fines!)
• Business-related accommodation and meals while travelling

Note: Commuting to a fixed office doesn’t count, but travel to client meetings or events does.

6. Training and Development

HMRC allows you to deduct the cost of training related to your current business, not new ventures.

Claimable:

• Courses to upskill in your field (e.g., graphic design masterclass)
• Online webinars and certifications
• Industry-specific subscriptions or journals

Not claimable:

• Training to start a completely different trade
• University degrees or general education

7. Bank Charges and Interest

Running a business account? You can claim:

• Monthly account fees
• Transaction charges
• Business loan interest
• Payment platform fees (e.g., PayPal, Stripe)

Using a personal account? It’s a bit trickier — you’ll need to work out the proportion related to business activity.

8. Insurance and Professional Memberships

You can deduct:

• Professional indemnity insurance
• Business contents insurance
• Memberships to professional bodies (e.g., NUJ, CIPD)
• Industry-related directories and networking platforms

Reminder: Subscriptions must relate directly to your freelance work.

9. Phone and Internet

If you use your personal mobile or broadband for work, claim the proportion you use for business.

• Keep itemised bills if possible
• Estimate usage reasonably (e.g., 70% for business)

Alternatively, consider getting a dedicated business line or SIM card — it simplifies tracking and is 100% claimable.

10. Clothing and Uniforms

This one’s tricky — you can’t claim for everyday clothing, even if you wear it for work.

You can claim if:

• It’s a uniform with your branding
• It’s protective clothing for your trade
• It’s required by the role (e.g., safety boots, hairdresser’s apron)

Can you claim a new suit for a client meeting? Sadly, no — even if it’s just for business, HMRC counts it as dual-purpose (also suitable for personal wear).

Lesser-Known (But Legitimate) Deductions

Postage and Stationery

Even if you’re mostly digital, sending physical invoices or posting samples is deductible.

Software Licensing

Monthly fees for things like Adobe, Canva, or project management tools are valid.

Co-Working Spaces

Freelancers renting hot desks or shared offices can deduct those costs entirely.

Depreciation (Capital Allowances)

If you invest in expensive assets like a high-end camera or machinery, you may claim depreciation over time.

Keeping Records: The Key to Successful Claims

What Does HMRC Require?

To back up your deductions, you’ll need:

• Invoices and receipts for each expense
• Bank statements or payment confirmations
• Mileage logs for claiming vehicle costs
• Digital records (especially under Making Tax Digital rules)

Keep these for at least 6 years in case of an audit.

Tools to Make Life Easier

Consider apps like:

• QuickBooks
• FreeAgent
• Xero
• Wave

They help automate tracking and categorising expenses, making tax season far less stressful.

Common Mistakes to Avoid

• Claiming non-allowable expenses (e.g., personal shopping, daily lunch out)
• Forgetting small deductions — those £10 expenses add up!
• Rounding guesses instead of using real figures
• Losing receipts or failing to back up digital invoices
• Not separating personal and business finances

Set up a dedicated business bank account — it makes everything simpler.

Conclusion: Small Deductions, Big Impact

When you’re freelancing, every penny counts. The more you understand about tax deductions, the more control you have over your income. You’re not trying to “cheat the system” — you’re simply using the rules to your advantage, as HMRC fully intends.

Here’s your recap:

• Allowable expenses reduce your taxable profit, not your income
• Keep good records and stay consistent
• Claim only what’s reasonable, and know where the line is

So next time you’re scanning a receipt or paying for a Zoom upgrade, ask yourself: Is this helping me run my freelance business?

If yes, you might just be able to claim it.