• BYadmin - July 31, 2026

• BUSINESS & FINANCE
• tax returns

Why So Many People Get Their Expenses Wrong and What HMRC Actually Allows

Right, let’s talk about expenses. Specifically, the ones people think they can claim, the ones they’re too scared to claim, and that strange grey fog in between where most of the confusion actually lives.

If you’ve ever sat with a shoebox of receipts wondering “does this even count,” this one’s for you.

Nearly everyone gets something wrong here. Not through dishonesty really, mostly through guesswork. You hear something from a mate down the pub, half remember it, apply it to your own situation which is completely different, and suddenly you’re either underclaiming out of fear or overclaiming out of confidence you probably shouldn’t have. Both are problems in their own way. Neither feels like one at the time, though.

There are Two Types of Mistakes People Make Most of the Time

The Over Claimers

1. Trying to expense the entire phone bill when it’s used for personal calls too
2. Calling a coffee meeting “client entertainment” when there wasn’t really a client involved
3. Putting through clothing that isn’t genuinely protective or a uniform (that blazer you wear to meetings? No, sorry)

The Under Claimers

1. Not claiming home office costs because it feels a bit like cheating
2. Skipping mileage because keeping a log seemed like too much bother
3. Leaving out training courses because they weren’t sure it “counted” as a business cost

Which one are you, honestly? Most people lean one way without even realising it. I certainly know which camp I’d have fallen into before I actually sat down and read the rules properly.

So What Does HMRC Actually Say Yes To?

Here’s the part that actually matters. The general rule HMRC applies is that an expense has to be “wholly and exclusively” for the business. Three small words, and somehow they cause an enormous amount of confusion.

Things that usually qualify:

1. Office costs. Stationery, printing, a portion of your phone bill if it’s mixed use
2. Travel costs for business journeys (not your regular commute, that one catches people out constantly)
3. Clothing that’s a genuine uniform or protective gear
4. Staff costs, if you employ anyone
5. Costs of goods you buy to sell on
6. A proportion of your home running costs if you work from home. Heating, electricity, even a slice of the rent or mortgage interest, worked out fairly

Things that usually don’t:

1. Regular commuting between home and a fixed place of work
2. Clothes you’d wear anyway, business suit included
3. Parking tickets don’t become deductible just because you got them on the way to see a client
4. The personal element of anything mixed use, unless it’s split fairly

The “Wholly and Exclusively” Trap

This phrase gets its own little section because it’s honestly where most arguments with HMRC start. It doesn’t mean mostly for business. It means wholly. Exclusively. If there’s a personal benefit tangled in there somewhere, you generally need to apportion it rather than claim the whole thing and hope nobody looks too closely.

A question worth asking out loud, because it comes up all the time: can self employed people claim for working from home? Yes, generally, but it has to be a reasonable, calculated proportion, not a flat guess because it “felt about right” at 11pm while doing the return.

The Emotional Bit Nobody Really Talks About

Claiming expenses makes some people properly anxious, in a way that doesn’t quite match the actual risk involved. There’s this lingering fear of an investigation, even for people doing everything correctly. And then on the flip side, some people claim things they absolutely shouldn’t, almost daring HMRC to notice.

Neither extreme really serves you well. The middle ground, claim what’s genuinely allowable and keep the records to back it up, is boring advice. But boring advice tends to be the correct one, annoyingly.

Where This Feeds Into Your Wider Filing

This isn’t just an expenses conversation sitting on its own though. It feeds directly into how accurate your tax returns for self-employed people end up being. Get the expenses wrong, even innocently, and the effect ripples through the whole return. Underclaiming means overpaying tax you didn’t need to. Overclaiming means a correction, or worse, further down the line.

1. A few practical habits worth adopting, almost as a passing thought:
2. Keep a simple spreadsheet, even a rough one, rather than relying on memory
3. Photograph receipts the moment you get them; they fade faster than you’d think
4. Separate personal and business banking if you haven’t already; it saves so much untangling later
5. Revisit HMRC’s allowable expenses list once a year, because things do shift about

When to Just Ask Someone For Help With It

There’s a point where the guesswork stops being worth it. If you’re genuinely unsure whether something qualifies, or your expenses have got complicated enough that you’re second-guessing every entry, that’s usually the moment to bring in outside eyes. This is where speaking to local tax advisors in Edinburgh tends to save people far more than it costs, not because the rules are impossible to learn on your own, but because getting it wrong quietly, year after year, adds up in ways you don’t notice until it’s a real number staring back at you.

Related odds and ends worth a quick search if you’re already down the rabbit hole: simplified expenses mileage rates, use of home as office calculations, and the difference between capital and revenue expenses. All connected threads, all worth ten minutes of your time.

A Closing Thought, a Bit Rambling

There’s something almost personal about expenses, isn’t there? They’re a small daily record of how you actually run your working life. The coffee, the mileage, the laptop that finally gave up on you last winter. Getting them right isn’t about squeezing every last penny out of HMRC. It’s about being honest with the numbers so the bigger picture, the return, the tax owed, all of it, actually reflects reality.

Keep the receipts. Ask the annoying question when you’re not sure. And maybe stop apologising for claiming the printer ink. You earned that one fair and square.