When I started working for myself, I knew nothing about tax deductions. I didn’t even realise I could claim internet bills, travel costs, or even printer paper. I thought tax deductions were only for big companies. 

At the end of my first year, I paid way more tax than I should have, and I only found out when I met with a real accountant. Since then, I’ve changed how I do things, and now I’m here to help you avoid the same mistakes. Self-employed professionals like us can save a lot by understanding and using tax deductions properly.

What Counts as Self-Employed?

Many people are self-employed without even realising it. If you earn money without being on someone’s payroll, you’re likely self-employed. That includes freelancers, consultants, tradespeople, small shop owners, and even folks running side hustles on weekends. 

You’re also self-employed if clients pay you directly and you send them invoices for your work. If no one is deducting tax from your payments before they hit your bank account, you’re responsible for reporting your income and paying tax on it.

Understanding your status is important because it tells HMRC how you should file your taxes. And once you’re officially self-employed, you get access to a bunch of tax deductions that can lower your bill. This guide is for anyone earning money this way—whether it’s your main job or just something you do on the side.

Why Tax Deductions Are a Big Deal

A lot of people ignore tax deductions because they think they’re too small to matter. But those small things—like fuel costs, phone bills, or even coffee used in your home office—add up fast. 

When I started tracking my expenses, I was shocked at how much I could claim. By the end of the year, I had saved over £2,000 just by keeping better records and knowing what counted.

Here’s the thing: tax is based on your profit, not your total income. If you make £40,000 but spend £8,000 running your business, you only pay tax on £32,000. That’s a big difference. And once you start making more money, those savings get even bigger. 

Tax deductions are not loopholes—they’re part of the rules. HMRC wants you to report your income honestly and claim your expenses fairly. If you do that, you’ll pay exactly what you owe—nothing more.

Top Tax Deductions You Shouldn’t Miss

Let’s go through some of the main things you can claim as a self-employed worker. These are the deductions I use every year—and they’ve saved me more than I expected.

If you work from home, even just one room, you can claim part of your home costs. This includes rent, electricity, water, gas, council tax, and even cleaning if it’s related to your workspace. The way you work it out depends on how much of your home you use for business and how many hours a week you spend working there. 

For example, if you use one room in a five-room house for 40 hours a week, you might be able to claim 20% of those household bills.

Your phone and internet are also valid claims if you use them for work. Even if you only use your mobile phone half the time for work, you can claim 50% of your phone bills. The same goes for your Wi-Fi—if your business runs on it, you can claim a share of the cost. In my case, I claim 60% of my broadband because I use it all day for client work and video calls.

If you drive for work or travel to see clients, you can claim those costs too. You can either track your mileage and use the flat rate (45p per mile for the first 10,000 miles) or keep receipts for fuel, insurance, and maintenance. I tried both methods, and I found the mileage rate was simpler for me, but either one works, as long as you’re consistent.

Office supplies are often forgotten, but they count. That includes your printer, ink, pens, notebooks, staplers, postage, envelopes, and anything else that keeps your business going. I once claimed over £300 in a year just on small items like these. It may not sound like much, but that’s money you don’t have to hand over to HMRC.

One of the most useful deductions I use is for professional services. If you hire a bookkeeper, accountant, solicitor, or consultant, their fees are fully tax-deductible. This is where having a solid partner like Auditors  Cambridge or a trusted accountant in Cambridge, UK, helps. Their advice saves you time and money, and their fees are claimable too.

Training and education are also valid deductions if they relate directly to your current job. A few years ago, I paid £500 for an online course that helped me improve my skills as a consultant. I was able to claim the full amount. Just remember—if it’s training for a new career, it doesn’t count. But if it helps you get better at what you’re already doing, claim it.

Marketing and advertising are more important than ever. You can claim the cost of website hosting, online ads, business cards, social media tools, email platforms, and even content writing. I spend a good amount on promoting my services and always make sure I claim those costs. It keeps my business growing—and it lowers my tax bill at the same time.

The Tricky Ones: What You Think You Can Claim… But Can’t

Here’s where people often get caught out. Some expenses feel like they should count, but HMRC says no.

For example, you can’t claim personal clothes, even if you wear them for meetings. Unless it’s a uniform with a logo or special safety gear, it’s not allowed. I once tried to claim a nice shirt I bought for a client meeting—my accountant told me to take it off the list.

Meals are another tricky one. You can only claim meals when you’re travelling for business, and even then, only if it’s outside your normal work area. Taking a client to lunch? Usually not allowed. Grabbing a sandwich while working from a café? Also not claimable. The rules are strict, and it’s easy to get them wrong.

Repairs to your home don’t count unless they affect your workspace directly. I had a leaky roof once, but the repair wasn’t claimable because it wasn’t just for my office.

Entertainment is also a big no. You can’t claim tickets, outings, or any kind of personal entertainment—even if it’s with a client. These rules may feel tight, but it’s better to know now than risk a fine later.

Record Keeping: Boring but Vital

Let’s be real—keeping records isn’t fun. But it’s one of the most important parts of managing your taxes. HMRC can ask for proof of any claim you make, and if you can’t show it, they can deny the expense or charge a fine.

I keep both digital and paper records. I scan every receipt using an app on my phone and store the originals in a folder by month. I also download my bank statements and save all client invoices. At the end of each quarter, I review everything to make sure it’s in order.

There are great tools out there to help. I use FreeAgent for my accounting—it connects to my bank account, tracks income and expenses, and even reminds me of deadlines. Other good options include QuickBooks and Xero.

HMRC says you must keep records for five years after the 31 January filing date. So if you file in January 2025 for the 2023–2024 tax year, you need to keep those records until at least January 2030. That’s a long time, so it’s best to stay organised from the start.

UK Tax Year Dates You Should Know

Timing is everything with tax. The UK tax year runs from 6 April to 5 April the next year. That’s your reporting window. If you’re self-employed, you’ll need to submit a tax return for every year you earn money.

If you plan to file a paper return, the deadline is 31 October after the end of the tax year. But if you’re filing online, which most people do, the deadline is 31 January. That means you have nearly 10 months to get things in order. Just don’t leave it to the last minute.

If you owe tax, you might also have to make a “payment on account”—this is an advance payment toward your next year’s tax. The first part is due by 31 January, and the second by 31 July. These payments can surprise new self-employed people, so it’s good to be ready.

Mark these dates in your calendar, set reminders on your phone, and plan. Missing a deadline comes with a £100 fine, and it goes up the longer you wait.

Common Mistakes Self-Employed People Make

I’ve made some of these mistakes myself and seen others make them too. One of the biggest ones is waiting too long to start working on your taxes. January creeps up fast, and if you don’t have your receipts or numbers ready, you’ll be scrambling at the worst time.

Another mistake is forgetting to claim basic expenses. I’ve met people who didn’t know they could claim mileage, internet costs, or postage fees. That’s money they lost without even realising it.

Some folks also think they don’t need help, even when their income grows. But taxes get more complex as your business grows. That’s when it’s smart to work with someone who knows the rules. I brought in an accountant London firm when I started earning over £50,000—and it was a game changer.

Why Working with Cambridge Auditors Saves You Money

There’s a reason I keep going back to Cambridge Auditors. They don’t just file your taxes—they explain what you’re allowed to do, help you find legal savings, and stop you from making costly errors. I first used them after getting a scary letter from HMRC. They sorted everything, handled the back-and-forth, and even found deductions I missed.

They know what self-employed people need. Whether you’re a photographer, consultant, or hairdresser, they speak your language. They also understand local business life better than some national firms. That’s why I stick with a local accountant in the Cambridge, UK team. They’re reliable, clear, and they listen.

And if you’re in a larger city and need something more specialised, a well-rated accountant in a London firm can help too. But wherever you are, getting help from professionals like Auditors Cambridge can protect your business and lower your tax.

Wrap-Up

Here’s my final advice. Track everything. Don’t guess—ask. Claim what you’re allowed, and keep proof of it. Use accounting tools to stay on top of things. And don’t wait until January. Spread the work out over the year. Your future self will thank you.

If you want peace of mind, talk to Cambridge Auditors. Their help made my taxes easier, cheaper, and less stressful.

Now that you know what you can claim, the next step is learning how to set up your taxes to avoid lump-sum payments.