7 Commonly Missed Tax Write-Offs Every Small Business Owner Should Know

If you own a small business in the UK, you have to deal with the complicated tax laws while also trying to grow your business. Every legitimate expense you can claim lowers your taxable profit, which means that more money stays in your business instead of going to HMRC. Most business owners know the basics, like how to claim for stock and equipment, but many forget to claim for other expenses that could save them a lot of money on their taxes.

These are seven tax deductions that small businesses often miss that could save them thousands of pounds a year.

1. Allowance for Working From Home

You can deduct some of your household costs as business expenses if you run your business from home or work from home a lot. A lot of sole traders and small limited company directors don’t get this useful help.

You can use HMRC’s simplified expenses method to claim a flat rate based on how many hours you worked from home. For example, you can claim £10 per month for 25–50 hours, £18 per month for 51–100 hours, or £26 per month for 101 hours or more.

Work out what percentage of your home you use for business. Then claim that same percentage of your rent or mortgage interest, council tax, bills, internet, and home insurance.

The most important thing is that the space is used for business. You don’t need a separate room, but you do need to be able to show that you are using it for business. Keep track of your calculations and be ready to back them up if HMRC asks.

2. People Often Forget about Business Mileage

Most business owners remember to claim mileage for trips to see clients or suppliers, but many trips that qualify go unclaimed. You can get mileage relief for going to the bank for business, going to networking events, driving to buy business supplies, going to training courses, and even going to meet your accountant.

For the first 10,000 business miles in a tax year, you can claim 45p per mile. After that, you can claim 25p per mile. These are the approved mileage allowance payment (AMAP) rates for directors and employees of limited companies. Sole traders can either claim their real costs or use the simplified mileage rates.

Keep a detailed record of your mileage that includes dates, destinations, reasons for travel, and miles travelled. You can’t claim for driving to your normal workplace, but you can claim for traveling between different work sites. Many business owners lose hundreds of pounds each year simply because they don’t record these journeys properly.

3. Subscriptions and Development for Professionals

Putting money into your professional growth is not only good for your business, but you can also write it off on your taxes. It’s okay to pay for yearly memberships to professional groups, trade associations, and approved professional organizations, but many business owners forget to claim them.

You can also deduct the cost of training courses that improve your current business skills, as well as industry conferences, seminars, and workshops. You can also claim books, trade magazines, and online learning platforms that are directly related to your business.

The most important thing is that the training is useful for your current business and helps you keep or improve your current skills. Most of the time, courses that teach you completely new skills for a different job or trade don’t count. Keep track of what the training covered and how it helped your business by keeping receipts.

4. Using Personal Mobile and Broadband for Business

A lot of small business owners use their personal cell phones and home broadband for work but never report the business part. You can claim a fair amount of the costs if you use your personal devices to make business calls, send emails, and do research online.

For your cell phone, figure out what percentage of your calls are for business and claim that amount on your monthly bill. The same rule applies to broadband at home. You can get back half of the cost if you use it for business.

If you mostly use your phone for business, you could also think about making it a business expense. Keep track of your calculations and be careful when you make guesses. HMRC thinks that claims should be fair and reasonable.

5. Fees and Costs Related to Banks

You can deduct the costs of your business bank account, overdraft, credit card, payment processing, and loan arrangement fees. These costs can add up to a lot of money, especially for businesses that take a lot of card payments.

You should keep track of and claim transaction fees from payment processors like PayPal, Stripe, Worldpay, or SumUp. Fees for exchanging money for business transactions, fees for making payments to other countries and fees for keeping merchant accounts all count.

You can deduct the interest on business loans and business credit cards. However, it can be harder to claim the interest on personal loans used for business purposes, especially for limited companies. Instead of trying to put together all of your financial charges at the end of the year, keep detailed records of them all year long.

6. Clothes and Uniforms (if needed)

This is a tricky area, but there are real claims that a lot of business owners miss. You can’t deduct regular clothes, even if you only wear them to work. You can, however, claim specialist clothing that you have to wear for work but wouldn’t wear otherwise.
You can wear protective gear like hard hats, steel-toe boots, hi-vis jackets, or gloves for manual work. You can write off the cost of cleaning uniforms that have the company’s name on them.

Costumes for actors or period clothing for people who re-enact history for a living also qualify.
If you need to dress very well for work with clients, everyday business clothes don’t count, but special items like stage costumes or safety gear do. The most important test is if you would wear the item every day.

7. Digital Subscriptions, Apps, and Software

Because of the digital transformation of business, software and online tools are now necessary costs of doing business. You can spend money on things like accounting software (like Xero, QuickBooks, or FreeAgent), customer relationship management systems, email marketing platforms, cloud storage services (like Dropbox or Google Workspace), and website hosting.

This includes the growing number of digital tools that businesses rely on, such as project management software, video conferencing subscriptions like Zoom, design tools like Canva Pro, social media scheduling platforms, password managers, and apps made for specific industries. You can even claim some smartphone apps that you bought just for work.

You can also deduct the cost of registering a domain name and getting an SSL certificate for your business website every year. Many businesses pay for dozens of small subscriptions throughout the year that add up to a lot of deductible costs, but they often don’t claim them because they aren’t tracked in a systematic way.

Making Sure You Get What You’re Owed

These seven areas that people often forget about are real chances to lower your tax bill legally and properly. Keeping accurate records all year long is the key to getting the most out of your tax-deductible expenses, not trying to remember everything when your tax return is due.

Use accounting software to keep track of expenses as they happen, keep digital copies of all receipts, and write down why each expense was necessary for the business in case someone questions it. If you’re not sure if something qualifies, it’s a good idea to talk to a qualified accountant who knows how small businesses are taxed.