Expenses you can and can't claim

It's the end of a long week. There's a carrier bag on the passenger seat full of receipts. A new pair of rigger boots. A new set of meter leads. Four days of bacon rolls from the site canteen. A Travelodge in Burton. Fuel, lots of fuel.

Some of that goes in the books. Some of it doesn't. And the bag has been sat there since June.

Most engineers either claim too little, because they never get round to the bag, or claim the wrong things and hope. Both cost you money. The rules are simpler than they look once you know the test HMRC applies.

The one test that matters

For a sole trader, an expense comes off your profit before tax if it's allowable. GOV.UK gives the example of £40,000 turnover and £10,000 of allowable expenses. You'd pay Income Tax on £30,000 (GOV.UK).

Behind that sits one test. The trade purpose must be the sole purpose (HMRC BIM37600). If something has a business use and a private use, you can still claim the business part where you can measure it. Your van is the usual example: the actual cost of work journeys, plus a share of the insurance, tax and repairs.

So the question for every receipt is the same. Did I buy this only for the work?

A word if you run a limited company. You're not self-employed, even if you're the only person in it. The company deducts its costs before Corporation Tax instead (GOV.UK). The thinking is much the same, but the forms and some rules differ. A limited company for engineers covers that side.

Clothing: boots yes, jeans no

You can claim for protective clothing such as safety boots or hard hats. Overalls count if you only use them for work. So do uniforms that aren't everyday clothing (GOV.UK).

You can't claim for everyday clothing, even if you only ever wear it on site. Work trousers that look like any other trousers are a grey area at best. We'd leave them out.

The rigger boots go in. So do the gloves, glasses, ear defenders and arc flash kit.

Tools and test kit

Under cash basis, which is now the default for sole traders, the things you buy and keep for the business go in as allowable expenses. Cars are the one exception (GOV.UK). So the meter leads, the torque wrench and the new laptop for PLC work all go in the year you buy them.

If you use traditional accounting, kit like that goes through capital allowances. The annual investment allowance lets you deduct the full value of most plant and machinery, up to £1 million* (GOV.UK). Few engineers get near that.

Keep the receipt for anything over a few quid. If HMRC asks, a photo on your phone beats a memory.

Phone, laptop and the spare room

Only the business share of your phone bill counts. GOV.UK's example is a £200 phone bill with £70 of business calls, so you claim £70 (GOV.UK).

If you do your invoicing and quotes from home, you can claim a share of heating, electricity and internet. You need a reasonable way to split the costs, such as the rooms you use or the hours you work there. Simplified expenses give you flat rates for working from home if that's easier (GOV.UK).

Training: the rule changed

You can claim for training that improves skills you already use, or keeps you up to date with technology in your industry. You can also claim for new skills linked to changes in your industry (GOV.UK).

You can't claim for training to start a new business, or to move into an area that isn't directly related to your industry.

For a maintenance engineer, a refresher, an 18th Edition update or a course on a new drive range should fit. A mechanical fitter adding electrical skills is a judgement call, so check before you claim. From mechanical fitter to multi-skilled covers which courses are worth doing.

Insurance, fees and memberships

Any insurance policy for your business counts, such as public liability. Accountants' fees count, along with bank charges and interest on business loans (GOV.UK).

One surprise is on that same page. You can't claim the cost of preparing and submitting your Self Assessment tax return. Fines for breaking the law are out too. So are parking fines and other penalty charges (GOV.UK).

Trade body or professional membership counts if it's related to your business. Gym membership doesn't (GOV.UK).

Food: where most claims go wrong

The bacon rolls stay out.

HMRC's view is that food eaten for sustenance isn't allowable, even if the work makes you hungrier. The leading case involved a sub-contract carpenter buying lunch on sites near home. The court refused it (HMRC BIM37660).

Nights away are different. If a job means a night away from home, the hotel and reasonable meals with it are deductible (HMRC BIM47705). So the Travelodge in Burton goes in, with the evening meal.

Buying the site's maintenance manager lunch to keep the work coming is also out. You can't usually claim the cost of entertaining clients (GOV.UK).

Travel has its own rules

Fuel, parking, train fares and hotels are on the allowed list. Travel between home and work isn't (GOV.UK). For an engineer moving between sites, what counts as "work" is the whole question. Mileage and travel works through it.

Two traps

The £1,000* trading allowance is tax-free, but if you use it you can't claim expenses at all (GOV.UK). For anyone buying tools, PPE and fuel, real expenses almost always come out ahead.

You don't send receipts with your return. But you should keep proof so you can show HMRC if asked (GOV.UK). The carrier bag counts as proof right up until it goes through the wash.

What to do on Monday

1. Empty the carrier bag. Photograph every receipt and file it by month.
2. Split your phone bill and work out a fair share of home costs if you do office work there.
3. Take food out of your claims unless it was eaten on a night away.
4. Check any course you're planning against the training rules before you book it.

* The £1,000 trading allowance and the annual investment allowance amount correct as of 18 October 2026. Check GOV.UK's guide to expenses if you're self-employed for the latest.